Q: I am 44 with two kids, 7 and 9. I have savings of $100,000 but do not own a house. My income is about $1600 a month, which just covers my expenses. My rental is about $200 a week. I am concerned about my ability to own a house and put the kids through school and retire. What would you propose?
Monday, July 4th 2005, 8:08AM
by The Landlord
A: You should buy a modest home or unit. It gets you into the housing market and gives you and the children more of a base. Landlords can't kick you out and it's easier to decorate the way you like, to develop a garden and so on.
If you make mortgage payments the same as your rent, of about $867 a month, you could get a 20-year, $106,000 loan on a five-year fixed rate of 7.6 per cent. By the time we add your savings and subtract purchasing and moving expenses, you have about $200,000 to play with.
It's still possible to buy a small home for that price in parts of Auckland and if you live elsewhere - or are willing to move - you'll get more for your money.
