“Young homeowners Raman and Kamalpreet Khangura say disciplined saving is the best way to banish financial fear.
The Abbotsford couple have so far kept their heads above the debt that threatens to drown many young British Columbians. The Khanguras keep an iron grip on their spending and salt away every dollar they can.
In February, the couple — without help from family — bought a $527,000-home in Abbotsford, paying $27,000 down. They have a $2,000-a-month mortgage payment.
That’s a lot of debt. And Raman, 26, admits to having had some passing worries before buying the house.
He reassured himself by going over the details of the financial plan he and Kamalpreet, 27, had prepared.
“I was thinking before we bought that it might be difficult, it might be a big challenge but when we got the home we found things were okay,” he says.
“We’re careful with our money.”
The Khanguras have no other debts and are determined to keep it that way. Credit cards are paid off each month. Their line of credit will only be tapped in the direst of emergencies.
The $1,000 a month they get in rent from a basement tenant is tucked into RRSPs. Mortgage payments come strictly out of their salaries.
Kamalpreet works as a certified dental assistant. To boost their income, Raman works two jobs — a full-time position managing a trucking repair company and a part-time bookkeeping job.”
- article and image from ‘Young British Columbians struggle the hardest with debt’, Paul Luke, The Province, 29 Oct 2011
20-somethings. 2011. $27K down, $500K mortgage. “Careful with money”. (eyeroll)
Repeat: 20-somethings; modest income; $527K purchase.
This is not “care”, this is not prudence, this is gambling.
For people who “salt away every dollar”, it’s going to be torture for them to watch a torrent of downward prices leech away all of their savings and then some; perhaps up to five times their savings. – vreaa
(BTW, what are the likely mortgage variables that get you $500K for $2K per month? Are they on variable rate?)