Friday, January 25, 2013

Winning the lottery wouldn't be enough...

Before we bought our beautiful heritage house, we had a meeting with the bank where they looked at our debt ratio.   I was depressed.  I was sure that we wouldn't be able to afford the house.  But then, miracles of miracles, the bank said yes we could.

The bank lied.

In the 70s?  My family lived in Nova Scotia and we'd buy a lottery ticket where the grand prize was $100,000.  It was SO MUCH money!  We would spend hours and hours dreaming as a family about what we would do with those winnings.  The trips we we take, the cars we'd buy, the pool we'd install.  If we won $100, 000 now, it would only pay off a third of our debt.   If we were to win the Early-Bird draw from one of those Home Lotteries?  We would still owe money to the bank.

The bank says, "Here, have a credit line!  Here, have another credit line!"

We say, "Are you sure we can afford all this?"

The bank says, "We are completely sure!"

The bank are lying bastards.

They talk about the benefits of home ownership.  You're not throwing money into a black hole of rent - you have 'equity' in your home - it's an investment.  What they don't talk about?  Is the fact that you'll never have disposable income again once you own a house.  Maintenance on a house is expensive.   And maintenance on a century home?  Forget about it!  There's a reason they are called money pits. 

We are so fucking house poor.  Every job?  Costs at least $1000. Minimum.  And when you're in a heritage home or even heritage district, you can't just go the economical way.  The Heritage Committee can't tell you what you can do to the inside of your home, but they are fascists about the outside.  If we were to replace or repair our windows to satisfy the Heritage Committee?  It would be about $1000, per window.  We have 37 windows - not including the basement windows.

You don't think about this when you fall in love with a house.  You are seduced by the butler's pantry and servants' staircase and claw footed bathtub and sloped ceilings in the attic.  You salivate over the wood-burning fireplace and transomed windows.  You don't think about the fact that it will take, according to the rate at which we are paying down our debt now (which is the 'one step forward, 3 steps back' ratio), 75 years to pay off our debt.  I just did the math.  I'll be 119 when I'm debt free at this rate.  Not a problem!  The women in my family are long lived. We'll pay it all off and then we'll be able to afford that trip to Disney - with the grandkids, great grandkids and possibly great grandkids.  It'll be a helluva party!

1 comment:

  1. Exactly the reason I continue to be a tenant by choice. Many people believe the cost of home ownership is he mortgage and maybe the taxes. But you have to assume you're going to spend between 1%-3% of the value of your home every year on the maintenance required to keep your home in good shape, not even considering upgrades. Add in heating, etc and you're spending a pretty penny. And my favourite is pointing out to those smug homeowners who tell me that I'm pissing away my money on my rent that they will, over the life of the mortgage, give their bank about 2 to 3 times the value of the home in interest payments. Talk about pissing away money!