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Melissa and Frank, 30, Toronto

She's a family medicine resident at a busy hospital, he's a PhD candidate in computer science. They may have big brains, but they also have a big dilemma: Should these first-time homebuyers keep renting and save up for their dream house - and risk higher prices - or get into the market now?

HE SAID: Buy now

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We've been talking about buying a house for ages, and we finally got ourselves a mortgage preapproval and a real estate agent. We've got our eyes on a few neighbourhoods, but we're willing to explore the whole GTA, and possibly even outside. We haven't exactly been blown away by what we've seen so far in our price range, but I'm still hopeful. To be honest, there's always going to be something about every house that we don't like, so we should be open to compromise. Now is a good time to buy, while there's a bit of a dip - I say strike while the iron is hot. Who knows what the market will be like in a couple of years - if prices get much higher, we'll still be in the same situation.


Maybe I'm a bit of a princess, but I really can't imagine moving into a house on a busy street, or taking on major renovations. With the crazy hours I work, I just don't have the time or the energy to deal with a huge, stressful project like that. The problem is, all we've seen are fixer-uppers and places in up-and-coming (read: sketchy) areas. I'm hoping for a quiet neighbourhood near the TTC and at least three bedrooms, and I'm convinced that there's nothing out there in the price range we're looking for right now. Maybe we should just bide our time a little longer until we're both making more money. I'll be done my residency in two years, and Frank will have finished his PhD.

Vital Stats

Years married: 3

Annual household income: $90,000 ($50,000 hers, $40,000 his)

Current rent: $1,700 for a one-bedroom plus den, downtown

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Price range they're seeking: $350,000 to $450,000

Down payment: 20 per cent

Debt: $100,000 (her med school tuition)

THE ADVICE: Stay put

Financial expert Kelley Keehn:

Sorry, Frank, your main argument - that housing prices may increase in the near future - just isn't strong enough to persuade me that you should rush into the market and settle for a fixer-upper. My crystal ball is a bit cracked as to where prices are headed in the near future, but let's look to some authorities. Bank of Canada head Mark Carney believes that Canadians are overstretched and Finance Minister Jim Flaherty still thinks the global economy is in a high state of uncertainty. Their predictions aren't absolute, but it's likely the Toronto housing market won't soar in the next year or so.

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I'm leaning to Melissa's logic. (And, for the record, I don't think she's being a princess at all.) You're both young professionals with careers to focus on. You don't sound like Mike Holmes-esque reno prodigies. Your price range will force you far into the suburbs (perhaps Hamilton, for a decent price) and within months of buying you could be planning your next move when you see the maintenance and upkeep required on even a brand new home.

Although you've been preapproved, I still think it would be a stretch at your income to afford a home now. With a $450,000 home in mind and 20 per cent down, you're looking at a monthly payment of just about $2,600 (based on a 5-year-fixed 3.99 per cent, 25 year amortization plus the average estimated cost for heating and property taxes at $700). Tack on other household expenses, closing costs and more, I'd be concerned that you'd be on the road to house-poverty.

My advice? Save up for a few years, get Melissa's student loan paid off and focus on building an emergency reserve. It still might not buy you a home fit for royalty, but it also won't land you on the next disaster DIY show.

Kelley Keehn is the host of W Network's Burn My Mortgage. Her website is

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