MORTGAGE OVERLOAD 

Young kids, big debt – and nothing left for savings

JACQUELINE NELSON

THE GLOBE AND MAILLAST UPDATED: FRIDAY, DEC. 09, 2016 8:22PM EST

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Soaring house prices have made Canadians wealthy on paper, but what are households giving up in order to make their mortgage payments? As part of our package on the financial squeeze being felt by Canadian homeowners, we profiled six families across the country to see how they are coping.

Name and age: Sonu Baraya, 34, and his wife Amrita, 32

Location: Brampton, Ont.

Family description: Two children, who turn three and two, next month, and a third child due in March.

Price paid for home: Just purchased a new house in Caledon East for $615,000

Outstanding mortgage balance: $585,000

Non-mortgage debts: Each has about $20,000 on lines of credit; balance on VW Golf, balance on new Chrysler Pacifica minivan.

Biggest monthly non-housing expense: Car payments. The vehicle payments are $315 biweekly for the Pacifica, and another $177 for the Golf.

Are you regularly putting money away for savings or investments? Not saving

If you had to find $3,000 for an emergency, where would it come from? Line of credit

Biggest joy you have as a homeowner: Having a place to call my own.

Biggest financial regret as a homeowner: Developing unrealistic expectations as a young person of what would be affordable in the future

As a young man, Sonu Baraya didn’t envision a life with so much financial stress.

“About a decade ago I would have thought that when I got married I would want to live with my parents and have my kids raised in that home [by their grandparents] so that my wife could go to work,” said Mr. Baraya, who grew up in Mississauga.

But that didn’t happen. High-school teacher Mr. Baraya, 34, and elementary-school secretary Amrita, 32, are raising their family together without extensive help from family. In February, they will move into their fourth house since they got married – just a month before they welcome their third child.

A new minivan, pricey Costco runs and a broken neck that led to months of recovery for Mr. Baraya have all taken their toll on the couple, even as they’ve paid down debts. The Barayas have been looking to trim their budget, moving to Caledon, where prices are cheaper, but farther away from their favourite takeout joints in their current Brampton neighbourhood.

They are also planning to deliver their third baby at home with the aid of a midwife to save on the child-care costs that would have been occurred for their other two kids during a hospital stay.

Mr. Baraya teaches through the summer months to bring in more income and hopes to one day dedicate more of his money to saving. He’s also hoping his next home will later offer a financial boost like his past two property sales did.

“I’m considering the purchase of a home as an investment and something that would appreciate in value,” he said. The couple has profited in the sale of their past two homes.

“We’re hoping to use those funds to pay up debts, rather than bring down our next mortgage,” he said.

Photo by Jennifer Roberts for The Globe and Mail