Just bought a house & getting married in 9 days! Any Advice?

[doulos]

In no particular order

#1 Keep separate checking accounts. Split up bills and come up with a savings plan. Make savings goals and prioritize spending.
#2 Don't feel the need to fill up the house. My wife and I bought a house and doubled our size this past March. We still have an empty dining room and basement.
#3 Like others have said, paint before you move in. It is so much easier without furniture.
#4 Don't pay extra on your mortgage. Whatever else you would pay on top of your mortgage, save in mutual fund. It should grow at a faster rater than your mortgage rate.
#5 Pay close attention on spending on what you need versus what you want.
#6 Make friends with you neighbors. This is especially important since you are living in a townhouse and are sharing walls. If problems come up, it is much easier to get cooperation from your neighbors if you are coming from a background of friendship. And maybe friendship is not necessary but it definitely pays to be friendly.
#7 Consider joining your townhouse association board. I lived in a townhouse for 8 years and was a member of the board for the last 4. You end up learning so much about your by-laws and you will be a more educated neighbor. Plus, you will be more influential and powerful if you have any special interests or issues that arise.
#8 Think about resell value when you make home improvements.

That's all that comes to mind off the top of my head. Good luck and congrats.

I find it fascinating how different people are. These tips obviously work for you, so I'm not criticizing, but some of them are very different for me.

1) My wife and have joint everything and it makes our lives so easy financially. Couldn't imagine doing it any differently.

4) Mortgage vs Investments is always a tricky one and a lot of it comes down to human behaviour. Actual investment returns, mortgage interest rates, and available yearly lump sum payments all make this calculation different for various people. We crunched the numbers and it actually still makes sense (currently) for us to make RRSP payments every month, but then use our tax return every year as a lump sum payment on the mortgage.

7) I loathe townhouse boards etc. Most irritating things possible and I'm so glad to just be on a street in my own home and away from those crazies. Sounds like you've had a much different experience than myself!

8) Resell is only really important if you have any fairly short term plans to actually resell. Our family worries more about doing whatever we want to the house to make it the way we want. One thing that people tell you never to do is renovate your garage. Well we totally ignored that, put in laminate flooring on one half of the double-car, television, beer fridge, etc and now it acts as both a place to workout, and a place to hang out and watch movies etc in the evenings. Sure, several years down the road we might lose value in it when the next person comes along and wants that half of the garage back for an actual vehicle, but until that time we've used it and loved it!

[Bomm Bastic]

I never said not to pay off your mortgage early. It's going to take years to pay off your mortgage. Over the number of years it takes to pay your mortgage you should easily beat the 3%-4% of your mortgage by investing your money. Take that extra money you are going to pay for principal every month and invest. Build your portfolio. When the day comes, pay off your mortgage. Besides, this is Dooley's starter home. What is the difference when he moves if the money is sitting in a mutual fund or if it's in the equity of his home?

We're looking at it from two different perspectives. Yours from an investment mine through a balance sheet - neither right nor wrong. I just don't like debt. And I certainly don't like paying banks (ala interest payments) any more than I absolutely need to. Again I'm in the States, so I don't know how it works elsewhere.

[Nights]

Funny...I always find those advocating not paying off your loan/mortgage early are either bankers, 401k fund managers or some other conflicted source of info.

Pay the mortgage off early. At $1,000 extra principle payment per year you'll cut that 30yr into a 15 yr. Then you can invest what was your mortgage payment into a mutual fund (even half) and rapidly make up that lost $50/month in no time.

Not to mention no one will foreclose on your house if you miss a mutual fund payment due to injury, illness, or job loss.

lol...I am amazed at how some people embrace debt.

It's more people see "I have 1000$ more dollars. Either I pay down the debt that costs me 3% (or w/e) interest, or I use it to gain 6% interest (or w/e). I make a 3% return! (although in this case, inflation would hit you to make it a 0 to 1 % actual return on your buying power, but some people rather that then losing the 3% to interest and the 3% to inflation as a double whammy". It's a pretty rule in finance. If you can make more interest then you would pay with that money, then do it. Of course, there's the risk involved in where you invest it, so most people would rather just have the peace of mind of the finished mortgage. But, this is only in the case of extra money. There should still be a fairly important (10~20%) part in his budget for long term, retirement savings.

It's entirely preference. "Would you rather have some in savings now and maintain your mortgage just a while longer while compound interest does it's work? Or would you rather have the mortgage gone and peace of mind?".

Some people go for money. Some go for peace.

@Daydream Nation : Same idea. Golden rule in finance - every investor is different. Some have higher risk tolerance then others. Some have different goals and aspirations.

As noted by bomm and doulos, "leveraging" your debt to get a return is a tactic that many do not feel comfortable with. I wouldn't personally take out a loan @ 4% to invest it in a fund that makes 7%. What if in a perfect storm, the bank has to recall my loan and that 7% return fund is worth nothing because there was just a market crash? You're ****ed. I don't like that idea, so I'd rather not take that 4% loan and deal with not getting that 4% actual return (which again, would be dented down to 0~1% inflation). Numbers are examples, although if you're going to be getting significantly higher return, you're taking in a ton of risk. Plus, you have to be careful because the market rebounded between 2008 to 2011, meaning it had incredible gains to make up for the ground lost in the crash. Even if from the math sense, it makes some sense to do it (go from 4% lost + inflation 7% - (4% + inflation)), but the risk also goes up higher, and while it's not usually posted as financial information, is something that has to be taken into consideration.

Some people, however, look at that return and figure it's worth it. They are willing to take that chance. That's what this is, a chance. You're guarantee to pay the interest on your mortgage for the terms agreed to as long as you have a principle. You could get a better return if you invested that money elsewhere, but that's no guarantee.

[Pengwin7]

A couple good notes I'll chime in on.

re: Checking Accounts.
My wife & I mostly use our joint account for everything.
But it is good to have a "no questions asked' personal account. It's also good for buying gifts under-the-radar.
We each get $100/month into our personal accounts.
She buys clothes, I buy hockey sticks.
We don't get to challenge those purchases of each other. Works well.

re: Mortgage vs. Investment.
The general rule of thumb for any spending of money is to attend to the highest percentage % first.
If you have 15% credit card debt, 6% investment gain, 3% mortgage rate... then that's the order you do it in.
There was a time in the 80s & 90s when mortgage rates were higher than returns - so it was worth paying down your mortgage first.

[dooley89]

Wow, so many posts, I appreciate all the advice!

hope you put the 20% down!

We put 20% down and are planning on making accelerated payments - I have no problem living well below our means if it means we can make larger mortgage payments! We have very low car payments that we make at 0% and our student debt is very close to being paid off. Luckily I have been very very blessed to work where I do and be able to make the appropriate payments before ridiculous amounts of interest kick in!

In no particular order

There is an old lady across the street who is on the condo board and she already yelled at me for parking on the road last week, I think I am going to look into it just to get a better idea of what goes on like you said! Our neighbours seem a little crazy but I am sure we will warm up to them lol – everything is about resell right now in my mind!

re: Checking Accounts.

We are going with joint accounts and will most likely do something very similar with allocated money per month! I need to buy hockey sticks!

As a European i still can´t believe the fact that in North America it is common to move together after the wedding and not testing it out prior.

I don’t even know if this is common in North America – I don’t think it is around here. For us it has just been a personal choice, you would probably die if I told you the other things we haven’t done before marriage haha!


Thanks to everyone else who posted something – I started to name them but literally if you posted the thanks is for you!

[Gentle Yeti]

Easy way to address the "extra mortgage payment" issue being discussed - get a house you can afford a 15 year loan on instead of a 30 year, but it sounds like OP already has closed on the house. Any chance you can swing the 15 year loan? For a tad more a month, you cut the debt duration in half. It's pretty sweet math.

[Daydream Nation]

I find it fascinating how different people are. These tips obviously work for you, so I'm not criticizing, but some of them are very different for me.

1) My wife and have joint everything and it makes our lives so easy financially. Couldn't imagine doing it any differently.

4) Mortgage vs Investments is always a tricky one and a lot of it comes down to human behaviour. Actual investment returns, mortgage interest rates, and available yearly lump sum payments all make this calculation different for various people. We crunched the numbers and it actually still makes sense (currently) for us to make RRSP payments every month, but then use our tax return every year as a lump sum payment on the mortgage.

7) I loathe townhouse boards etc. Most irritating things possible and I'm so glad to just be on a street in my own home and away from those crazies. Sounds like you've had a much different experience than myself!

8) Resell is only really important if you have any fairly short term plans to actually resell. Our family worries more about doing whatever we want to the house to make it the way we want. One thing that people tell you never to do is renovate your garage. Well we totally ignored that, put in laminate flooring on one half of the double-car, television, beer fridge, etc and now it acts as both a place to workout, and a place to hang out and watch movies etc in the evenings. Sure, several years down the road we might lose value in it when the next person comes along and wants that half of the garage back for an actual vehicle, but until that time we've used it and loved it!

Good conversation

1) The more I think about it, just find something that works for you. My wife and I met in our early 30s when we were both financially secure and were used to paying our own bills. It was an easy transition when we moved in together to keep things separate. Nowadays, she pays for all the kid stuff and her expenses and I pay for the house and our bills. But it works easily since we both work. I could see how if my wife was a stay-at-home, we would do things differently. Like Pengwin said, I do think it's important to have some separation of finances and some freedom to buy some things you want without getting questioned. I never question the clothes my wife buys and she never asks about my rods and reels.

4) While I understand all the mortgage payment plans, I think it is living life too conservatively. We set up our 401s and IRAs with the expectation of compounding growth through stocks and bonds throughout our working life in order to retire. Why is the same approach not good enough for paying off our mortgage? And while I am not happy with debt, it doesn't scare me. From a security standpoint, I see no difference in paying down your mortgage versus knowing I have X amount of monthly payments sitting in my portfolio. It's all about what grows faster. I just took out a big mortgage this past March. I put down the 20% needed to avoid PMI and I only pay my monthly amount. I aggressively save in my IRA and other mutual funds. Yes, I owe a lot of money on my house but I also have 100+ mortgage payments sitting in my portfolio that will make more than my 3.5% mortgage. Since I am 40, I am using a Roth IRAs for tax-free growth. At 55 when I can get at that money, I will pay off my house. But even if I was younger and didn't want to use the Roth, I would still use taxed funds. (Not sure what you guys have in Canada but this works for me in the States.)

7) Townhouse boards are not that terrible. It is better to be on the board or at least going to the meetings than to be in the dark. I don't ever want to live in a townhouse again but they are good options for some.

8) Dooley will most likely be in the townhouse for less than 10 years before they start popping out kids and move to a house. I agree not to be a slave to resale but keep it in mind when doing major projects. Then again, since it's a new townhouse they shouldn't have to do much. Things like flooring, countertops, doors, tile and trim probably won't be a concern. Paint isn't a big deal but neutral decor usually helps with resale and when he goes to sell he'll be competing with the other townhouses in the area.

[Nights]

@daydream - you clearly have a much higher risk tolerance then some of us here :P Imagine if those "100+ mortgage paypents sitting in my portfolio making more then the 3.5% mortage" were to in the blink of eye lose most of their value (see : 2008, September), and all of a sudden you'd also lose your job for an extended period of time, thus not having the liquidity required to persue payments, for example. I have no doubt you've done your research and have figured a portfolio that would hedge you against that (not 100% equities, some liquidity, have some emergency money on the side, counting inflation as part of your real return calculations, etc...), and you're appetite for risk as at a level where it can absorb that. But don't assume everyone else is at that same level of risk tolerance :P

Like I said, it's the idea of leveraging your debt for returns. Mathematically it makes sense, but for some people it's something they are not comfortable doing. I have a friend who studies in finance at the moment (very passionate about the field, doing a masters right after) and he talked with a friend of mine on this very subject. Even as someone who studies in the field, he does do it, and knows full well of the math behind it and all, but it still leaves him uneasy - to see a debt on one side and yet see growth on the other, with that same money. I can only imaging how people not well versed in the subject would feel in the same shoes.

[Big Ev]

Depends how young you are too. You should take on more risk when young.

I will be facing this dilemma in a year and a half or so. I will have put 20% down of around $300,000, then my plan was to have a mortgage of about $210,000, but I'm not sure if I should just go with the 80% and invest instead. I will probably try to lower my mortgage as much as possible.

[doulos]

@daydream - you clearly have a much higher risk tolerance then some of us here

Yeah that's the kicker here. He's not even wrong, as long as he has the stomach for it. I can't handle that sort of risk personally, so just from a behavioral standpoint, that's not the way I can roll. It's also why Index Investing is a perfect match for me and my personality. I take risks in other areas of life, not so much my money.

[Call of Doughty]

Think we should change the OP's thread to "Mortgage and financial advice.." Reading this is just like being back in high school math class.

When does the bachelor party talk begin?? Or did that already happen?

Oh, get a king sized bed, well worth extra cost. Very comfy.

[Nights]

Yeah that's the kicker here. He's not even wrong, as long as he has the stomach for it. I can't handle that sort of risk personally, so just from a behavioral standpoint, that's not the way I can roll. It's also why Index Investing is a perfect match for me and my personality. I take risks in other areas of life, not so much my money.

I'm pretty similar (edit : Disclaimer - studying in accounting, so that can explain things :P). It's just nature - people are different.

My only point in all of this was to say "Sure, it works fine for you, and you're willing to take it, but please don't say it as if it's something everyone should do without talking about the different factors related to the decision. Not everyone has the willingness to accept that risk, or the knowledge on how to manage the risk to hedge it".

[Nights]

Think we should change the OP's thread to "Mortgage and financial advice.." Reading this is just like being back in high school math class.

When does the bachelor party talk begin?? Or did that already happen?

Oh, get a king sized bed, well worth extra cost. Very comfy.

I mean, I'd bring in more to the thread then that if I had any more to bring on. Being young and forever single and all, I can't really contribute to him with anything of actual value or experience.

[dooley89]

Think we should change the OP's thread to "Mortgage and financial advice.." Reading this is just like being back in high school math class.

When does the bachelor party talk begin?? Or did that already happen?

Oh, get a king sized bed, well worth extra cost. Very comfy.

haha its all good, advice and thoughts have been chimed in over the course of the thread!
Bachelor party will be somewhat tame. Gonna take the sea-doo out for a rip on lake simcoe, bbq, poker, cigars, beers, casino rama and call it a night lol

[Pengwin7]

Bachelor party will be somewhat tame. Gonna take the sea-doo out for a rip on lake simcoe, bbq, poker, cigars, beers, poker, casino rama and call it a night lol

That actually sounds pretty fun.
For my bachelor party, me & 5-6 friends sat in the backyard and played "Century Club".
I didn't make it.
And we ran out of beer.