New Home Buyer Question [Archive] - REVscene Automotive Forum

i-VTEC

07-12-2013, 01:35 PM

Gnomes

07-12-2013, 02:50 PM

4. If you buy presale, ask the sales rep if you were to not have a realtor, would you get bonus discount, free parking spot, etc. If the sales rep says no, then find a realtor who will give you back 25% commission as finder's fee/self-referral fee.
Of the 100% commission, 50% goes to the presale rep, 50% to realtor.

quasi

07-12-2013, 03:09 PM

I'll prequalify by saying I'm not an expert and if I'm incorrect in any of my assumptions please correct me.

1) Assuming it's same rules as it was before HST was brought in, 5% GST only.

2) They'll look at both of you combined.

3) You can get a one time exemption from property transfer tax which is a substantial chunk of change.

4) It's your first time, you probably should but then again I never did with my first purchase.

5) I'm sure it would depend on your insurance policy, can't answer the question.

A couple things you never mentioned that you need to account for.

-You'll have to pay property tax when you buy. It's based off the fiscal year for taxes. If you buy a place that's owned by someone already you pay them back the taxes left for that year that they've already paid.

-CHMC Insurance, if you put less then 20% down you have to pay this. It's on a scale and the rate changes depending on the percentage you put down and amortization.
More information found here CMHC Insurance | Mortgage Insurance | CMHC Mortgage Calculator | CMHC Insurance Rates (http://www.ratehub.ca/cmhc-mortgage-insurance)

-Home insurance, you're going to want this so don't overlook the costs, you can get estimates before you buy.

catalin

07-12-2013, 03:23 PM

Gridlock

07-12-2013, 06:50 PM

I'm not an expert either and I can only speak from my experience.

Realtors complicate everything and they won't protect you if anything goes wrong. The lawyers do, which you have to see anyways to complete the paperwork. Bringing a realtor to house listed by another realtor is just a major bitchfest by the realtors when you're not looking. They're both after your money and the listing realtor can accept other offers without a realtor EVEN if your offer is accepted. Yes even with a signed contract. Real Estate board didn't do anything for me as I'm sure it happens a lot.

You should really try and buy something that's built already. It's better that they ask for your money then you asking for them to repair deficiencies.

Good luck
Posted via RS Mobile

What?

Gnomes is talking about how even in a pre-sale situation, there is a realtor commission baked into the price. So, as a buyer, you never pay for a realtor, so if its baked in the price, why not use one? Or, get a cut back for not using one.

And if your realtor is fucking things up, then you need a better one.

There is a whole bunch of ways that selling a house can get fucked up. Yes, sometimes realtors screw it up, but sometimes you find someone that makes it simple.

Bonka

07-12-2013, 06:54 PM

1. Purchase price + GST (5%) + Transitional Tax (2%, applicable if possession date is before April 1, 2015)

2. Go visit a bank or better yet, a mortgage broker. Mortgages are highly customizable based on the client's financial history and needs. Less than 20% down payment requires mortgage insurance. I have known clients who have had money "gifted" to them to top them up to circumvent bank requirements.

3. None significant. Lost the up to $10,000 rebate for new homes when HST was abolished. You can get up to $750 credit on your next year's tax return. You will avoid Property Transfer Tax if you're a First Time Buyer purchasing a property below $425,000, below $450,000 you get a partial exemption.

4. Up to you. I get the public perception with them because I work with them. Like any industry, many are horrible but there are actually good, honest ones out there that would be valuable to the client. Personally I would rather have a Realtor for a new development purchase - developers are interested only in one thing, your money. Don't expect those generally unlicensed sales representatives at the sales centres to look out for you - they either don't know how, don't know much and certainly don't make enough money to make it worthwhile for them to go "above and beyond.

Regarding commission rebates, doesn't hurt to ask but my experience is that most developers will not throw in "freebies" just because you don't have a Realtor. Gnomes hit the nail if you are inclined to want a kickback get a Realtor and have them rebate you back a portion. If you go this route, I would still find someone competent.

5. Are you talking about the insurer paying the owners out directly? The building is insured for replacement value. Best to contact the building's insurer directly.

Catalin,
Legally, even if a property has firm deal (accepted offer, subjects removed, deposit paid) until it has completed, technically another Buyer could put an offer on the same property (typically with a higher price) to force the Seller's hand. It opens up a huge can of legal worms but it can be done. In practice it's rare but with the right kind of Seller it could happen. At that point while legal it's up to one's ethics to determine that outcome.

Sounds like with your experience the Realtor tried to double-end the commission. There's plenty to say about that...

catalin

07-12-2013, 07:19 PM

Thing is with me I have a tough time trusting people when it comes to buying homes. That what I was referring to earlier. Buying with a realtor on our side was frustrating. When we bought our latest home we only went through the selling realtor.

Our original home purchased 10+ years ago was without realtors all together after we were bumped out of a deal.
Posted via RS Mobile

dinosaur

07-12-2013, 07:23 PM

You should get a realtor or talk to the on-site people at the development. They can answer all your questions above.

Better yet, talk to your bank...you know, the one giving you the money.

Also....10% interest? :rukidding:

If you are buying a presale, the sales people will hook you up with a mortgage broker who will do all your bidding for you.

Here are some rough numbers:

Condo: $320,000
20% Down payment: $64,000
Tax: $12,800
Total Mortgage: $268,800

Ballpark 3% interest 5-year fixed paid monthly over 25 years

Mortgage Payment: $1,272.09
Property tax (average): $100.00
Strata: $250.00
Insurance: $75.00

Total monthly housing payment: $1697.09 (remember...this is just the roof over your head...now lights...no tv...no internet...no phone)

Banks calculate your mortgage approval on your income and debt. It is best you have as little of debt as possible...preferably, none. Living at home, this should be easier and I wouldn't suggest buying something with debt. If you have money saved for a down payment...use some to pay off your credit cards, etc.

The banks want a max of 30% of your income to go towards housing...or 3 times your yearly income. If you have an income with your partner of $80,000 a year, you are looking at a pre-approval of $240,000. However, you need to have a substantial down payment.

I did a rough estimate using a Mortgage Affordability calculator and with NO down payment, NO debt, and $80k a year income....you are NOT approved. With NO debt, a $64,000 down payment, and 80k a year income...you are approved for a $370,000 mortgage.

Just a tip...I know it is easy to come to RS and ask a bunch of questions...but take it from someone who is a home owner and was pretty damn blind about the whole situation, you will need to know everything possible. I suggest you pay around with mortgage calculators...A LOT! Figure out not only what you SHOULD afford...but what you CAN afford. Just because the calculator say you can pay $2000 a month...doesn't mean you should.

I am not sure spending $2000 a month on a one bedroom apartment is a good idea when you can rent a nice one for $1000. Where are you looking at buying?

Marshall Placid

07-12-2013, 08:28 PM

^
I think dinosaur is bang on.

Except, if you get the mortgage with your current bank and have banked with them for a long time, they will usually be much more lenient on you, giving you a larger mortgage and giving you a "4 times income" or "5 times income" monthly payment.

#2:
To confirm, it is you and your gf buying this unit right?

So, it is a "sealed-deal" type of relationship?

You have to think about what will happen in the future if the relationship does not work out.

Maybe, put it in writing/contract that if you guys do breakup, the purchased condo will be sold and the proceeds split evenly based on the amounts both of you put into the condo... just like a partnership agreement in a business.

You never know... better to be safe than sorry.

In regards to your parents.....

They won't be "co-signing" the mortgage.

What they'll be doing is being guarantors.

Unless... you want them to own part of the property, so it will be a condo owned by 4 people (you, your gf, and your parents).

#3:
You can use some of your RRSP savings to purchase a home and pay back your RRSP later. I forgot how this works, but if you have substantial RRSP savings, you can use them and not get penalized for withdrawing the RRSP, provided you pay back the RRSP within a set number of years.

#4:
For purchasing?

DEFINITELY get a realtor.

Also, the new development condos realtors are probably earning much less commissions than regular realtors.

Instead of the usually 3.5% of 3% commission, they are probably getting 1% or less, so don't expect the selling realtor to budge much.

#5:

There is a 10% to 15% deductible.

And yes, for replacement value ONLY.

So, if the cost for building that specific 1 bedroom apartment unit, you'll have to pay 10% to 15% first. Then, the insurance company will pay the rest. Your strata will be paying the insurance and you will pay the strata corp. If you want MORE insurance, you can buy more privately. Also, if you buy extra insurance, you can choose the "relocation" option, meaning that if the land that the apartment is built on is deemed "unbuildable", then the insurance company will pay extra to move you to another suitable "buildable" location.

Here is some advice:
In addition to applying for a mortgage with your "long-time" bank, also look for a mortgage broker like Dominion Lending.

Selanne_200

07-12-2013, 10:37 PM

To the best of my knowledge, you can utilize the first home buyer's plan which allows you to withdraw up to 25,000 out of your rrsp to go towards your purchase. Those money will not be subjected to witholding tax nor will it goes towards your income for the year. You have 15 years to pay it all back and each year paying 1/15 of it.

The benefit to it is that the money you have in your RRSP is pre-tax money, so you're buying using money that has not been taxed yet and you'll only pay taxes on that money much later in your retirement and hopefully in a lower tax bracket.

^
I think dinosaur is bang on.

Except, if you get the mortgage with your current bank and have banked with them for a long time, they will usually be much more lenient on you, giving you a larger mortgage and giving you a "4 times income" or "5 times income" monthly payment.

#2:
To confirm, it is you and your gf buying this unit right?

So, it is a "sealed-deal" type of relationship?

You have to think about what will happen in the future if the relationship does not work out.

Maybe, put it in writing/contract that if you guys do breakup, the purchased condo will be sold and the proceeds split evenly based on the amounts both of you put into the condo... just like a partnership agreement in a business.

You never know... better to be safe than sorry.

#3:
You can use some of your RRSP savings to purchase a home and pay back your RRSP later. I forgot how this works, but if you have substantial RRSP savings, you can use them and not get penalized for withdrawing the RRSP, provided you pay back the RRSP within a set number of years.

#4:
For purchasing?

DEFINITELY get a realtor.

Also, the new development condos realtors are probably earning much less commissions than regular realtors.

Instead of the usually 3.5% of 3% commission, they are probably getting 1% or less, so don't expect the selling realtor to budge much.

#5:

There is a 10% to 15% deductible.

And yes, for replacement value ONLY.

So, if the cost for building that specific 1 bedroom apartment unit, you'll have to pay 10% to 15% first. Then, the insurance company will pay the rest. Your strata will be paying the insurance and you will pay the strata corp. If you want MORE insurance, you can buy more privately. Also, if you buy extra insurance, you can choose the "relocation" option, meaning that if the land that the apartment is built on is deemed "unbuildable", then the insurance company will pay extra to move you to another suitable "buildable" location.

Here is some advice:
In addition to applying for a mortgage with your "long-time" bank, also look for a mortgage broker like Dominion Lending.

Gnomes

07-13-2013, 05:30 AM

This is one of my favorite mortgage resource, rate, and calculator site:
Best Mortgage Rates 5-Year Variable - Compare Today's Current 5-Year Variable Rates - 2.50% (http://www.ratehub.ca/best-mortgage-rates/5-year/variable?mortgageAmount=300000&amort=25&province=BC)

kluk

07-13-2013, 08:56 AM

finbar

07-13-2013, 09:01 AM

A rule of thumb, don't buy if you plan to move within 5 years.

dinosaur

07-13-2013, 09:40 AM

#2) Based on your age, income for the both of you and assuming a good credit I do not see why a bank would not lend to you. However, lending rules today have changed significantly over the past few years after the sub-prime mortgage crisis and banks are becoming much more strict and will require more proof of income. It all comes down to debt serviceability (TDS total debt service). This ratio has to be below 42% ideally and the lower the better. What this ratio tells the bank is from the income you and your gf makes, how much of it is currently channeling to your existing debt. If you do not have student loans, car payments etc then meting this requirement should not be a problem for you.

The interest rate for mortgages is based on the term you select (1year - 10 year mortgages). Right now the 5-year closed fixed is at 3.54% I believe.

You and your GF can split the mortgage payments in half but keep in mind that paying a mortgage is a long-term process (usually 20 years+) If you feel like she’s “the one” then sure why not. If not, you guys break up and shit hits the fan.

Just because you are young and have good credit it does not mean a bank will throw a $350k mortgage at you.

Here is something else you need to consider. If you have a down payment, they bank is going to ask you where you got it from. If it was a "gift", this will affect their decision. If this is money you have saved, they will ask for proof.

My first mortgage approval: I had a $30,000 down payment and made $98,000, good credit, no debt, etc. It was HARD trying to get a $300k mortgage and thats when they were handing them out like candy.

Don't be so sure that your income is good enough for approval. Its a sad sad day when $80k gets you shit. If you moved to bumpkinville USA, you'd be the richest person on the block.

dinosaur

07-13-2013, 09:41 AM

A rule of thumb, don't buy if you plan to move within 5 years.

No man....don't buy if you plan to move within 10 years. My home is worth the same as it was 5 years ago. Prices are not going up like they use to....and they won't be doing so for a LONG time.

My true thoughts: don't buy....rent. Wait until you are married and in your 30s to buy. Hang on to your freedom while you still have it.

Energy

07-13-2013, 09:44 AM

#2:
To confirm, it is you and your gf buying this unit right?

So, it is a "sealed-deal" type of relationship?

You have to think about what will happen in the future if the relationship does not work out.

Maybe, put it in writing/contract that if you guys do breakup, the purchased condo will be sold and the proceeds split evenly based on the amounts both of you put into the condo... just like a partnership agreement in a business.

You never know... better to be safe than sorry.

I don't know much about buying a new home but OP might at least want to know about the new Family Law Act where a person is considered a spouse if they have lived together in a marriage like relationship for a continuous period of at least two years.

So be careful if you guys break up (knock on wood).

Marshall Placid

07-13-2013, 01:34 PM

I don't know much about buying a new home but OP might at least want to know about the new Family Law Act where a person is considered a spouse if they have lived together in a marriage like relationship for a continuous period of at least two years.

So be careful if you guys break up (knock on wood).

Yes good point.

It's 2 years if I remember correctly for common-law spouse laws.

B!tch

07-14-2013, 07:04 AM

Before you buy, spend sometime reading this blog.

Book and Weblog ? Authored by Garth Turner ? Greater Fool ? Authored by Garth Turner ? The Troubled Future of Real Estate (http://www.greaterfool.ca/)

skiiipi

07-14-2013, 03:01 PM

Just because you are young and have good credit it does not mean a bank will throw a $350k mortgage at you.

Here is something else you need to consider. If you have a down payment, they bank is going to ask you where you got it from. If it was a "gift", this will affect their decision. If this is money you have saved, they will ask for proof.

My first mortgage approval: I had a $30,000 down payment and made $98,000, good credit, no debt, etc. It was HARD trying to get a $300k mortgage and thats when they were handing them out like candy.

Don't be so sure that your income is good enough for approval. Its a sad sad day when $80k gets you shit. If you moved to bumpkinville USA, you'd be the richest person on the block.

That is crazy....thanks for putting it into perpective.
That means w/ a single income of 100K+, it'll be hard to even get a 500K mortgage approved....
And to think any half decent home in Vancouver West side is in the 7 figure range.
Man vancouver is really not affordable for the working class...
Posted via RS Mobile

Marshall Placid

07-14-2013, 08:05 PM

That is crazy....thanks for putting it into perpective.
That means w/ a single income of 100K+, it'll be hard to even get a 500K mortgage approved....
And to think any half decent home in Vancouver West side is in the 7 figure range.
Man vancouver is really not affordable for the working class...
Posted via RS Mobile

It also depends on your down payment.

Obviously the chances of an approval increases with a 25% down payment as opposed 10% down payment.

If the OP's down payment is 25%, I really think, in my opinion, that he will get approved, provided that his credit score is good and has little or no current debt (like he says).

Add to that, if his parents are guarantors, I really don't see why he will be not be approved.

That is a key question here as the OP did not state what his down payment is.

skiiipi

07-14-2013, 08:35 PM

It also depends on your down payment.

Obviously the chances of an approval increases with a 25% down payment as opposed 10% down payment.

If the OP's down payment is 25%, I really think, in my opinion, that he will get approved, provided that his credit score is good and has little or no current debt (like he says).

Add to that, if his parents are guarantors, I really don't see why he will be not be approved.

That is a key question here as the OP did not state what his down payment is.

yea, but Dino mentioned that a home should be about 3X your income....
so say with a 120K/yr income, the home I should be buying is 360K.....
so to buy a 1million home in van (which isnt even a super nice home), your income should be about 330K/yr? man I got a long ways to go....

Marshall Placid

07-14-2013, 10:08 PM

yea, but Dino mentioned that a home should be about 3X your income....
so say with a 120K/yr income, the home I should be buying is 360K.....
so to buy a 1million home in van (which isnt even a super nice home), your income should be about 330K/yr? man I got a long ways to go....

What she meant, I am assuming, was that the monthly payment must be 3 times your mortgage monthly payment.

The monthly payment is the amount in question.

A $250,000 mortgage roughly requires a monthly payment of about $1,600 at most or $1,300 here https://www.rbcroyalbank.com/cgi-bin/mortgage/mpc/start.cgi .

So, your monthly salary should be $4,800 or $57,600 annually for $1,600 at a HIGH interest rate or $3,900 monthly or $46,800 annually at 3.69%.

If the OP has a down payment of $70,000, the OP and his gf should be able to service the monthly payments easily.

The big question is the down payment.

The down payment is used as:
1- a hedge against price fluctuations for housing prices.
2- for the bank to recuperate the loan amount if OP defaults on monthly mortgage payments

So, banks very much prefer a 25% down payment.

-------------
So, for a $1 million house, figuring a $800,000 mortgage...

Let say you have $200,000 down payment and this is from parents or from savings or whatever...

The monthly payment is $4,100.

So, you need a $12,300 salary or $147,600 annually for a $1 million house.
------------------

For a $320,000 condo, the OP should be able to get a loan based on his numbers.

He only needs a combined income of 2 people of $57,600 annually if he has a $70,000 down payment, which he meets (the salary requirement).

-------------

Buying a house is exciting stuff.

The OP, I think, should have a "fun" time trying to find his and his gf's perfect 1st house.

The rest are just details (based on his numbers he gave ot us).

dinosaur

07-14-2013, 11:07 PM

No, it really is 3x your yearly salary.

My mother works for the banks and we talk a lot about mortgages, etc....especially as I am thinking about buying a second property.

Yes, Vancouver is stupid expensive and for a first time home buyer, purchasing a $500k house is not an option. This is why we have such an insane (good and bad) condo market here. They are all full of first time home buyers who have felt the need to buy something. Once you hit your mid-20s there is intense societal pressure to get into the housing market.

I bought a townhouse in Langley...and I really shouldn't have. Wrong time. Wrong position in life. Wrong market. Wrong location. I have it now and its fine....but its rented to tenants. If I could sell it, I would.

A first time home buyer literally needs to sell their soul....OR go to the bank of mom and dad. If you have a substantial down payment, it is a little easier but for the most part it will be a challenge. As I said previously, in 2007-2008 they were handing them out like candy....ZERO down payment FORTY year amortization LOW interest. We were all having a party toasting to how stupid it all was...and then it stopped.

Just as an aside in regards to purchasing property with an SO. This is where I was...together 9 years...why not buy a house. Signed the papers (mortgage was only in my name) and he walked 2 months later. Its shitty, but it happens. I am not saying if we were married that it would have been any different, but you need to be cautious.

I do think the market is to squishy right now....rent rent rent. Its cheaper and WAY more flexible. If you are set on buying....go SLOW and weight your options. Try to get as much as you can for your budget, even if it means staying away from new build. Also, try to get a place you can grow into instead of out of. How long will a one bedroom be sufficient? Do you want kids? when? If it is in within 8 years....go for a 2 bedroom because selling your condo after 5 will not turn out well...

Marshall Placid

07-15-2013, 01:34 AM

No, it really is 3x your yearly salary.

My mother works for the banks and we talk a lot about mortgages, etc....especially as I am thinking about buying a second property.

I was referring to the TDS, total debit service ratio used by mortgage specialists (reference: friends, mortgage brokers, mortgage "specialists", and of course, google), which is the key metric used in all of the mortgage calculators:

Google (http://www.google.com/#sclient=psy-ab&q=Canadian+total+debt+service+ratio&oq=Canadian+total+debt+service+ratio&gs_l=serp.3..0i22i30l2.6267.11170.0.11313.34.27.0. 5.5.0.154.2184.20j7.27.0...0.0.0..1c.1.17.psy-ab.JFMU0nSPCFQ&pbx=1&bav=on.2,or.r_qf.&fp=19928a1906394687&biw=1680&bih=949)

This is # is basically how well you can service your debt (monthly payments), not how much total mortgage is approved.

Of course, by using this TDS ratio, the bank will arrive a TOTAL mortgage that they will approve.

It can go as high as 44% or even 55% of your total income.

Based on a 33% ratio: you need a $12,300 salary or $147,600 annually for a $1 million house, with a $800,000 mortgage and a $200,000 down payment.

---------------------
There is also another talked-about number that people talk about and what dinosaur is referring to, and that is how much you should borrow based on your income (income multiple calculation).

It's an old adage or "rule of thumb" that people talk about, and some banks use.

So, if you earn $100,000 a year, people would say: "you should only borrow up to 3 times what you earn for mortgages".

And, I think this is what dinosaur is referring to.

Of course, that is unrealistic in our Vancouver market, so the banks use my aforementioned TDS ratio much more than the income-multiple calculation, as proposed here:

Changing The Way We Think About Mortgages (http://www.boomerandecho.com/changing-the-way-we-think-about-mortgages/)

If the 3 times income multiple calculation is used, then virtually nobody would be able to afford the $1 million dollar houses in Vancouver, and 80%+ (estimate) of DETACHED houses are $1 million or around there.

So, I am assuming that banks are using the TDS ratio much more than the income-multiple ratio.

Of course, this means many people are stretched very thinly for mortgage payments, and this is the reality.

-----------
In the end, I know I am not entirely correct.

I suspect the banks use a varying degree of the TDS ratio and the income-multiple ratio.

So, both dinosaur and my calculations are correct to... a varying degree.

Now, if only the OP himself would say something, assuming he subscribed to this thread.

Gridlock

07-15-2013, 10:22 AM

People get porned up on MLS.ca and go and trip over themselves to buy. Let's raid the bank of Mom and Dad, you know, the generation that made all the money, they owe us!

I can't even point a finger because a month ago I started saying to Dino...fuck it, we live for free, but let's BUY.

Why because BUY means you can tell people you OWN and in Canada even more than the states that is the keys to a club of people that own and you are better than people that rent. Forget the fact that its your parents and the bank that actually own, and you just live there. Those are small details.

And you tour the show homes and they are all excited that they have two color palettes for you to choose from...and has anyone else noticed that those two color choices are like..the same damned thing? Off white with dark beige, or off white with light beige?

Yummy!

And you realize that you are getting sucked into a world where you are arguing about what configuration you want that 850 square feet to be and you say, wait a second...who actually wants to live in 800 square feet? This(to borrow a line) is a filing cabinet for young professionals. At that size, forget buying condo sized furniture, I need to buy condo sized cutlery.

And I have a strata council telling me what size my dog can be. That sounds like I'm an owner! Can I bbq on the deck that I have? I don't know, I better check the book of rules that came with the apartment that I begged, borrowed and guilted my way into with multiple banks, one of which was family to buy. Doesn't matter anyway, no one ever enjoys sitting on the deck on the 20th floor.

The questions you need to ask are: how much to live here if I buy it or how much to live here if I rent it? If you include any possible appreciation in your monthly buy it calculation, those two questions cover all scenarios.

I pay: mortgage(equity+interest)
prop. tax
strata fee
--------
=x payment per month
-appreciation upon sale/months lived in unit
=new total cost per month to live there

Or: I rent
=y payment per month

if the new total cost to live is so much better than y, then you'd be stupid not to sign up.

I'm going to tell you though, that the sales people at the show home are NOT going to help you with those calculations. Their calculations are: how many of these fucking apartments can I sell while the interest rates are in the gutter where people don't even ask how much they are anymore. My favorite new way to create a rush, "hurry and lock in on low interest rates!!!"

Does anyone ask, "what happens in 5 years when I have to hurry and renew on high(er) interest rates?"

There are so many questions surrounding the market right now. I'll tell you one thing...its not going up.

"People of Vancouver! Hear me. House prices are NOT going up. Things have changed since the last 10 years of housing stupidity."

What does that mean? There is no rush. Agents are still trying to create a 'rush'. Apartments are selling fast! Better get in there. I don't know what its like in Vancouver, but I'll tell you out here its not true. The showhome centres have been in their locations a LOT longer than they should have. One had to move out of the building they were demo'ing because they had to demo the building. I think moving was a plan B. They were supposed to be closed.

So prices aren't going to go further. Bank on that. Bank on rates going up. Why? Because the banks got spanked by rating agencies that are looking at the debt that people like you are signing up for to buy stupid houses and apartments for ungodly sums of money telling themselves that anything under 10% interest is a gift.

So we have unsustainable prices, that mean we have to get parents that have money. We have interest rates that are going up to deal with a debt issue. We have more Vancouver being leveled to build more condos every day.

Do you think we have a world where prices aren't possibly going to fall? Do you want to buy at the top of a peak?

So that's the logic on money.

Now we're going to talk about you.

You are young. You JUST graduated. Why do you want to lock into owning a shitty one bedroom apartment in Vancouver that means you can't travel for a great amount of time, you can't do fun things because you are house poor and you now need to work until you die to pay a mortgage.

Because your friends did the same fucking thing?

Marshall Placid

07-15-2013, 09:48 PM

I forgot to mention to the OP...

Since it is your first house, you can get a pre-approval.

With a pre-approval, you know exactly how much you can spend, before shopping for houses.

And, then.... go out and do some "shopping" without worrying about how much you can afford or if the banks will approve you later, etc.

Of course pre-approvals are not 100% "approved mortgages", but I would say 99% approved once you close the deal.

i-VTEC

07-17-2013, 07:54 AM

So do I go to a bank first, get a pre approval mortgage, and the bank will let me know how much they can mortgage for?

Instead of pre sale condo shopping first and found a good one, which is $300,000 then fill out an pre approval mortgage application then found out that I am cannot mortgage that much?

dinosaur

07-17-2013, 09:38 AM

Go to the development and talk to the mortgage broker if you have found the one you want to buy OR find a mortgage brokers.

They will do all the shopping for you.

Gridlock

07-17-2013, 10:11 AM

I beg of you to also check one thing...what the rents are in the area for similar apartments.

Between strata fee and mortgage interest, you will not accrue massive equity gains by owning.

I wish to save you...you are exactly the type that these sales agents get wet for. Young little buyers that don't know the ins and outs of buying pre-sale.

Bonka

07-17-2013, 10:13 AM

If you're serious in buying something, get pre-approved first so you can lock in a rate and know what your ceiling price is.

If you intended on buying a pre-sale however, no bank will approve a mortgage until construction is near complete so definitely consider that if you are buying at the top of your price range because a slight increase in interest rate or market upswing can ruin your chances of getting that mortgage and wipe you out of your deposit if you can't close.

Gridlock

07-17-2013, 10:19 AM

^^Well, a mortgage broker hooked up with a condo marketing company will trade his left nut to make the sale happen because it lines everyone's pockets. Your mortgage might end up being through the national bank of kazmanistan, but they'll make it happen.

dinosaur

07-17-2013, 10:35 AM

OK, so I just sent you a PM, but I will comment here for others with similar questions to read.

Pre-sale vs current.

You had mentioned that you were looking at pre-sales that were to be completed in 2-ish years. Here is the problem with working on your budget now for a situation 2 years from now: Interest rates.

Interest rates are going up...and it will be a while before they dip again. People may think a difference of 1-3% is not a lot but when you are dealing with large sums, like mortgages, it makes HUGE difference.

Example:
I purchased my pre-sale townhouse in 2007. Rates were 6.49% (good, right? not by today's standards).

When you buy a pre-sale you do NOT get today's posted rate in 2 years time. At the most, a bank will hold a rate for 120 days (most of the time is 90). This means that within 120 days of you closing date, you get the lowest rate. However...that "low" rate could be 6.5%. Of course this works FANTASTIC if rates are going down...but they aren't.

When my townhouse closed in 2008, rates were down and I locked in at 3.74%. It was a difference of over $400 on my monthly payment.

If you have budget of $250k. $50k d/p. Today's rate 3% five year fixed: $900/month.
Same amounts but at a potential tomorrow's rate of 6.5%: $1270/month.

Now, not only can't you afford that monthly payment plus tax and strata, you can't even rent the condo out for that much.

IF you want to buy and IF you are going to buy no matter the housing market, BUY NOW.

i-VTEC

07-17-2013, 11:04 AM

I actually gathered a list of future condo that plans to build in Richmond, almost 25 Buildings, so if 100 units per building, that's 2500. Thats in Richmond alone, not counting new low rise buildings (even cheaper). Also Oakridge area plans on having 10 buildings around it. Supply is rising dramatically, while I don't think demand would be high if not the same.

2 Condos in Richmond I looked at recently, Concord Garden and Pinnicleliving. Both have sold 60% and 50% of total units respectively. But the thing is they have been selling for months.

A year ago or 2, Pre sale like 1st Phrase of Quintet in front of price mart in Richmond and Pre sale like Marine Dr, were sold out nearly first day of opening. But now we see Concord and Pinnicle having trouble.

Price is going down

i-VTEC

07-17-2013, 11:12 AM

Below is a list of future/developed High Rise Concrete Condos and in Richmond Only, Not including Low Rise Wooden Frame Condos

Future condos,

A Condo Directly in front of Canadian tire (Some China Developer)
PinnicleLiving (Building 2 Condos, and own 4 more lands, perhaps 4 more condos)
Concord Garden (Own Multiple Land)
Bravo
Harmony
River Park
Parc Riviera
Mandarin Residence
River Green
Park Residences
Carrera (Multiple Phrases)
Quintet 5x Building
Altis
Cadence
CCM Tower
Monet
Ora 3x Buildings
Another one near Esso Gas Station on Westminster

Condos Built in the last 10 years,

Nova (2012)
Emerade Green (2012)
Camber (2012)
Aberdeen Residence (2008)
Wall Centre 2x (2010)
Acqua (2007)
Seasons 3x (2007)
Prado 3x (2003,2009)
Versante 2x (2008)
Flo 3x (2008)
Lotus Living 3x (2008)
Capri 2x (2003)
Ocean Walk 3x (2007)
Paloma 2x (2007,2010)
Camino (2010)
Opal (2009)
Merry Park (2009)
Fullerton (2008)
Hamptons' Park 4x (2006~2010)
Residence On The Park 2x (2007)
Mandalay 2x (2009)
Centro (2009)

dinosaur

07-17-2013, 11:38 AM

Its not the price you need to concern yourself with...its the interest rate.

Anyone can find anything in their price range...the interest rate is the thing that can help or hinder you.

i-VTEC

07-17-2013, 11:51 AM

Its not the price you need to concern yourself with...its the interest rate.

Anyone can find anything in their price range...the interest rate is the thing that can help or hinder you.

"TD Mortgage Calculator

For a 25 year mortgage for $223,000.00 at the rate of 6.75%, your Monthly payment is $1,527.66"

Thats for 10 years 6.75 rate. But let say if interest rate stay the same at 6.75 forever.

Does that means I am paying $1,527.66 for 25 years which = $1527.66*12*25 = double the amount that I borrow of $223,000?

dinosaur

07-17-2013, 12:00 PM

YUP!

17838

Total borrowed: $226,236.00
Total paid: $488,304

i-VTEC

07-17-2013, 12:04 PM

Wow, then I am renting!

Its much faster to save up then borrow less money

dinosaur

07-17-2013, 12:06 PM

LOL!

People will try and avoid this by make a 13th payment every year which, iirc, will take 2-3 years off OR many bi-weekly payments that match with your pay cheques.

You can make accelerated payments to cut down on your amortization period and save some interest.

dinosaur

07-17-2013, 12:14 PM

This is what I mean about how interest rates are the key. Who cares about the cost of housing....yes, it is stupid high, etc and it can/might/must come down....it REALLY doesn't matter.

A $200k house at a 10% interest rate is just as un-affordable as a $700k at 2%.

You can sign a 5 year fixed at 3% and when its time to renew, you might have to lock in at 8%. That is going to take us down....and its coming.

i-VTEC

07-17-2013, 12:18 PM

How can you be certain Interest Rate going up :p

I don't know about the market, and you would definitely know a lot. Plan on sharing why you believe that's the case?

dinosaur

07-17-2013, 12:29 PM

They can not going down much more and the bank of Canada has been slowly raising prime rate which is what our interest rates are based on.

Last month you could lock in with BMO for a 5 year fixed at 2.90%. Yesterday it was 3.65% for the same terms.

Compare last year to this.

Everybody clinched their ass together from 2008-2010 waiting for our economy to tank the the USA. Although our gov't and banks are VERY different than theirs, everyone was waiting for the banks to shit the bed. It didn't really happen but as a result of that scary time, people stopped spending. We were standing on a cliff waiting to be pushed off....but that push never happened.

To jump start the economy (that in canada froze, but did not tank) the BoC dropped interest rates which helped our housing market putter along at an OKAY rate. It wasn't stellar, a lot of people got fucked, but OH LORD, it was nothing like the USA. Ours was more based on fear than actual issues.

Well, now everyone is starting to unclench and realize that MAYBE, just MAYBE we dodged a bullet and that shit is okay now....so people are starting to spend. BoC sees it and starts to increase their rates.

Here is the problem I see....there are a lot of people like you out there. Mid-20s...making okay coin...want to invest...why not buy. Your money NOW affords you want you want and today's interest affords you want you want. The problem is, the increase to your salary is not going to match the increase to interest rates. So, in 4-5 years time when your mortgage is up for renewal...you are not going to be playing in the 2s and 3s. The 2s and 3s are "jump start economy" rates. You will be playing in the 6s and 7s which is the "division of class" rates.

i-VTEC

07-17-2013, 12:39 PM

So its a gamble, its very likely that BoC sees this opportunely for people to spend and raise interest rates to cash in. Or BoC can remain the same.

i-VTEC

07-17-2013, 12:41 PM

on a side note, ING Direct has a Fix 10 year 3.99 Rate or a 7 year 3.69

miss_crayon

07-17-2013, 01:29 PM

Can I just make one comment. Two actually.

1) I feel bad for some of you who had bad experiences with BAD realtors. But I can tell you not every single one of us are the same. A lot of Realtors become realtors because they want to make money fast because they think it's so easy; so in turn they will lie and cheat their customers to close a sale when they realize it's not as easy peasy as people make it out to be. Those people are not in the business because they genuinely like what they do but because they think they are making a quick buck. Like any other job, you will meet good and bad people but wish some would stop painting us all with the same brush. I often try to leave comments in any real estate thread if there are questions because I want to educate those who don't know what's up.

TO the poster I quoted, I don't know the whole situation but I feel bad that you had to deal with an incompetant Realtor and had to be in that situation.

2) OP, what you end up doing (buying/renting etc) is up to you and the comments on this thread have good points. However, as someone who has seen this happen WAY too often, I think the bigger issue here is if you are ready to purchase something this big with your girlfriend. I am not saying or wishing your relationship will fail...but things happen sometimes and that's when something like this gets REAL messy. REAL.FUCKING.MESSY. I'm not trying to scare you or anything but it happens and it is not pretty.

Ex.)A couple months ago a Buyer had to forfeit their deposit (~$35,000) because him and his gf broke up and he knew he wouldn't have enough money for the additional deposits to come and pay the mortgage when it came time to complete (that is if he was to purchase it alone in the end).

$35,000 is not a small amount. I'm not saying all couples break up or anything when they purchase a house or something together but this question needs to be considered in my opinion. Rather now than later right?

Anyways, I wish you the best and hope you find something you love soon.

I'm not an expert either and I can only speak from my experience.

Realtors complicate everything and they won't protect you if anything goes wrong. The lawyers do, which you have to see anyways to complete the paperwork. Bringing a realtor to house listed by another realtor is just a major bitchfest by the realtors when you're not looking. They're both after your money and the listing realtor can accept other offers without a realtor EVEN if your offer is accepted. Yes even with a signed contract. Real Estate board didn't do anything for me as I'm sure it happens a lot.

You should really try and buy something that's built already. It's better that they ask for your money then you asking for them to repair deficiencies.

Good luck
Posted via RS Mobile

i-VTEC

07-17-2013, 01:40 PM

I know you guys are nice, and I know it would be really messy, but let just leave the relationship concern aside and focus on the real topic :p

Gridlock

07-17-2013, 02:16 PM

I think Crayon has a very valid point. Realtors can get shit on. I think there is a portion that truly deserve it. On the flip side, there are a TON of buyers and sellers that let themselves get taken by them too.

It is very difficult to get a 100% true answer from someone that is 100% commission. That's a fact. Not to mention that the real estate boards control both the buyers and sellers market and boast that they have all the buyers. And the worst thing for all of them is a down market. Oh, and that same group also provides and maintains the proprietary numbers on the amount of real estate transactions and prices. So if you want a system where you can rig the system...you invented it right there.

Now that was just focusing more on resale...pre-sale? The entire place is designed to function like a money funnel.

This poor guy walks in with his gf and the entire room sees money signs. He doesn't know the ins and outs of mortgages, and no one in that room is going to tell him that renting is even an option. Why would you rent??!? when owning has never been cheaper. Of course, you are signing up for mystery interest 20 years, because you will only have numbers for the 1st 5. Strata payment is kind of questionable. And your building may or may not even be a hole in the ground, so you have 2 long years in an unknown market and economy.

And you ask a realtor?

Well, its always a great time to buy or sell real estate!

Marshall Placid

07-17-2013, 10:24 PM

OP, looks like you are into pre-sale condos.

And, this depends on the completion of the development.

Usually, it is 1 or 2 years later.

As dinosaur pointed out, interest rates may go up and probably will.

And, the banks can only lock the interest rate in for a short period.

If you are buying to live as opposed to buying to invest, buy now.

If you are buying to invest, in a pre-sale condo, it is a big risk.

If you are buying to live, but only need to live in the condo 2 years from now, then skip pre-sale and buy 2 years from now.

Pre-sales are a risk all by themselves.

I would never, ever buy pre-sales.

----------

But, if you need to buy pre-sales, which completes a year or two from now, I really think interest rates, if they go up, would not go up by more than 100 basis points a year or two from now.

Why do I think so?

As you pointed out:
on a side note, ING Direct has a Fix 10 year 3.99 Rate or a 7 year 3.69

The banks themselves are offering a Fixed 10 year at 3.99%.

So, they are betting their bank (pun intended) that the rates will stay very low for the next 10 years.

Right now, the Bank of Canada's benchmark interest rate is 1%.

This is the rate in which chartered banks like RBC, ToDCT, BMO, etc. borrow money from BoC to lend to customers (you).

So, ING Direct (not chartered, but similar) has a spread of 3.99% minus 1% = 2.99% for profits.

So, yes, the banks are comfortable enough and confident enough the rates will not rise. If they do rise, it is only by a small amount.

One main reason to raise the benchmark rate is to "cool down" the real estate market.

And, on a NATIONAL level, the real estate prices are really not increasing substantially like what we SAW in the urban areas (Vancouver, Calgary, Tdot, etc.).

So, really, the Bank of Canada won't need to "cool" down the market because most of the increases are in large cities, and they account for a small population than ALL of Canada.

By this token, then your monthly payment won`t be very different a year or two from now (because interest rates won't rise, or rise only by 100 basis or 150 basis points), so if you want to do pre-sales, interest rates will be the same or a little higher 1 or 2 years from now.

But, in the end, pre-sales is a risk all in themselves, so prioritize your needs and wants:

1- Are you planning to move into the new condo now? Or 2 years from now?
2- If you rent, your rent disappears into the owner's pockets whereas if you own, your mortgage goes towards your OWN home.

If you want to buy an existing condo now, get a pre-approval.

It is easy.

Pickup the phone and get a mortgage broker like Dominion lending or talk to your mortgage specialist at your bank.

They will guide you through the process.

And, don't afraid to ask questions.

This is an opinion.

Gridlock

07-17-2013, 11:54 PM

Totally respect your opinion. I disagree with a lot of it, but I don't want to get into a "heh, you're wrong here and here thing"

It's your opinion, and I respect that.

There is one thing I'd like to address. This:

2- If you rent, your rent disappears into the owner's pockets whereas if you own, your mortgage goes towards your OWN home.

I disagree with this. The perception here is that each and every payment you make, you are one step closer to owning your home.

Great. Well, there's the strata payment. That's not exactly going to the whole owning thing. Interest is pissed up against the wind. That actually doubles the price of the condo over the life of the mortgage(ish). There is sales commisions on selling it. Legal fees.

Now you say, some of that is fair and some of it isn't. And I agree. Some of it is included in the price of rent. But I think its fair to say that today, apartment for apartment, it is going to cost more monthly to live in your own place than someone else's.

Whatever. I'm just saying its a LOOONG ass trip from signing the papers to making your last payment.

i-VTEC

07-18-2013, 07:42 AM

Before, I say anything, thanks so much guys.

First I am not considering low rise condo because they are made out of Wood.
Once fire goes out, it spreads. So I just want to mention low rise condo is not option for me, but will consider it if I have no other way. So I hope this won;t turn into another topic high rise vs low rise.

Whether it is pre sale high rise or existing built high rise condo (consider buildings constructed after 2003). The only thing, existing condo's price is more expensive than pre-sale. A condo that was built in 200X and the price is selling = to the pre sale price for a condo that will be built in 2015 or 2016. So which one is more worth it? I think the answer is obvious

Also we are considering Richmond only at the moment.

I am in an odd situation, my parents bought a 2 Bed 2 Bath, but it is currently shared between my older brother and I. He isn't planning to get married or move out any time soon, rather its going to happen to me first.

That condo will eventually be mine (really good location, so I will rent that one out later on). But I am likely to get married and have kids right away, within a year or two MAX. Our relationship has been very good, been bf/gf for over 3 years now. We have met each other's parents numerous times. So living in my current condo is out of picture. Any how the problem exist where I do not have a lot of cash on hand like in the bank. So since I am considering a pre-sale which won't be built 2 years from now, me and my gf will saved up a lot of money from our paychque(just paid all our student loan off, my car is paid for etc..) then instead of mortgaging 250K we probably just need 130K of mortgage, therefore I pay really little interests.

Gridlock

07-18-2013, 08:52 AM

First man, do what you want.

Personally all I'm saying is that in my mind this:

That condo will eventually be mine (really good location, so I will rent that one out later on). But I am likely to get married and have kids right away, within a year or two MAX. Our relationship has been very good, been bf/gf for over 3 years now. We have met each other's parents numerous times. So living in my current condo is out of picture. Any how the problem exist where I do not have a lot of cash on hand like in the bank. So since I am considering a pre-sale which won't be built 2 years from now, me and my gf will saved up a lot of money from our paychque(just paid all our student loan off, my car is paid for etc..) then instead of mortgaging 250K we probably just need 130K of mortgage, therefore I pay really little interests.

Doesn't really matter to me because this:

The only thing, existing condo's price is more expensive than pre-sale.

Is a problem no matter if you own 100% of the condo out right. The only difference is you can afford to lose your own money and not the banks money. THAT is the problem.

If you own a condo and you want to sell it(because despite your insistence to the contrary, it happens-people break up, jobs move, jobs go away, people move, cities start to suck, parents get ill>>dino and I dealt with 4 things on that list) Now, does that mean I should sit in a ball and wait for the sky to fall? No. But it means I can't be locked into a place that I can't sell.

And why can't I sell? Because developers are selling new shit for cheaper than I bought my now several years old shit.

Pre-sale, right now would have a HARD time convincing me that buying in, and locking in and not being able to sell is a BETTER move than staying a little mobile.

"Eventually it will be worth more"

Sure. Eventually. Eventually everything will be worth more...its called inflation. A Model T used to cost $250 and people had to save up.

Admit the problem. You are horny for a condo. Your girlfriend walked into a pre-sale on got all weak in the knees. At that point, the numbers don't matter, you will give your left nut to satisfy that urge.

i-VTEC

07-18-2013, 09:17 AM

1) We should never think negatively, oh my marriage will fail... etc.. I know there is a chance, but if you thought of it then it will likely to come true. Because a pre-sale condo isn't a big price tag, unlike a house thats > X Million Dollars. A Pre Sale Condo can be paid off easily, under 6 Years, but might be tough on the first few years.

2) The new pre-sale condo I plan to buy isn't for investment, its a place for my family to settle down. I know it is good to stay in mobile, but it is much better to settle down when a baby could come in 2 years. Moving is not as easy, especially, me and my gf works 9 to 5 Monday to Friday. A lot of things you have to change as well, telephone #, address forward, etc... all those little things. As a new family we usually want to own our new set of furniture, or beds etc.. owning a place to live feels secure, while renting is not so much as landlord can kick us out any time. I just think maybe its better to settle down a place.

3) Considering, Richmond Newly Developed(2008 Above) 1 Bed room High Rise sells at least over $330,000, Pre-Sale you are looking at $270,000.
So if a 2008 Built, 1 Bed Room Costs $330,000, Once The Pre-Sale Condo Finished Building in 2016, It could potentially be at least $360,000. Even for an investment point, buy low sell high, might be very good move still. However, i just don't think this is the case anymore as the supply is increasing... surely a lot of people buy pre-sale to catch cheap deals(but as I stated before, Concord and PinnicleLiving already having trouble selling the other 50% of total units after 3 months of showroom, the demands are decreasing, as a lot of people already bought a lot of pre-sale) I think in the end, no one will be buying once it has been built, it just simply unaffordable.

Vancouver Area is such a hard place to live, making 90K before tax between the couple is considered really really poor already. I can't imagine how others are doing... :(

I heard to live an above normal life, between the husband and the wife must work at least $33/Hour each person and full time

Gridlock

07-18-2013, 09:45 AM

Congratulations on your purchase.

dinosaur

07-18-2013, 10:18 AM

Why are you buying a 1 bedroom condo and planning on having a kid?

You said this is not an investment and you are planning on staying long term...but you want to raise a child in 500 square feet?

I give it less than 2 years before you realize how BAD of a decision you made.

Also, condos built 5-10 years ago are bigger...that why the pricing is the way it is. 2003 condo=600+ sq ft. 2013 condo=450 sq ft.

Considering, Richmond Newly Developed(2008 Above) 1 Bed room High Rise sells at least over $330,000, Pre-Sale you are looking at $270,000.
So if a 2008 Built, 1 Bed Room Costs $330,000, Once The Pre-Sale Condo Finished Building in 2016, It could potentially be at least $360,000. Even for an investment point, buy low sell high, might be very good move still.

Either you have not read a single word written in this thread or the OT Real Estate Bubble thread....or you are a troll.

To quote Gridlock....Congratulations on your purchase.

miss_crayon

07-18-2013, 11:40 AM

All in all, it seems to me like you already made up your mind on what you want to do. I don't think there is anything any of us can say or do anymore but as my last piece of advice:

As someone who has been in the business for years, my advice to you is hire a realtor. so he/she can educate you on the price you are actually paying and what come alongs with purchasing a property. Most first-time homebuyers just see the attractive prices and pretty showrooms but forget to ask the real questions.

I'll use one of your posts as an example:

A lot of people get this idea that pre-sale is cheaper than re-sale when really..it isn't always the case. Like above posted, older buildings seem like they are more expensive but that's because the size of the property IS larger and probably has all the extra little bonuses that a presale may not.

EX) Parking, storage, individual bike lockers etc

A lot of new developments now will not provide a parking/storage for you if the home is under a certain square footage/price because there is simply not enough space for everyone. On average a parking spot costs between $28K-$40K and a storage can range from $3K-$8000. It depends on the area but it's still a hefty price tag which may not seem "that important" at first glance but it makes a world of a difference when you are actually living in the building or need to sell it later on in the future.

There are so many minor details that go beyond the discussion on this thread that I strongly urge you to find a professional. It doesn't cost you a dime to have a Buyers agent, and trust me..there ARE good realtors out there amongst the bad ones.

dinosaur

07-18-2013, 12:17 PM

Along with the very important point that Miss Crayon brings up (parking, storage, etc), don't forget about the "upgrades".

If you walk through a show home, half of what you are looking at are "upgrades". Stainless steel, solid surface countertops, tiled floors, laminate/engineered/hardwoods, shower heads, faucets, laundry machines, etc...

$500 for this $14,000 for that...it adds up QUICK! Your $270k condo is now $310k. The $270k condo is gonna be barely painted walls and low quality flooring and fixtures. It will look nothing like the show home you fell in love with.

Buying re-sale, all these upgrades are built in.

Gumby

07-18-2013, 01:37 PM

Why are you buying a 1 bedroom condo and planning on having a kid?
Good point!

i-VTEC, I got married in 2003 and moved into a 1200 sq ft 2-level duplex. In 2008 we had a kid. In 2012, we sold our place because we didn't have enough space. In 2013, I will be moving into a house with roughly 2200 sq ft - for the 3 of us! Ideally we would like to have another kid.

My co-worker and her husband have 3 young kids in a 2 bedroom condo and they need to move out BADLY.

Edit: Oops I got married and moved out in 2004 actually...

SumAznGuy

07-18-2013, 01:48 PM

1) We should never think negatively, oh my marriage will fail... etc.. I know there is a chance, but if you thought of it then it will likely to come true

But you mentioned you didn't want a low rise because they are made of wood and if a fire happens, the fire will spread.

I'm confused here. Are you sure you're not trolling us?

With everything you've mentioned, I seriously think you and your GF need to sit down and rethink everything over.
Based on what I have read about you and your GF, first thing I'd do is go to a bank or a broker and get pre-approved so you know how much $$$ you can borrow and see the calculations on how much interest you will pay out over the 25 years to pay off the mortgage.
Then re-read everything that has been posted in the last few days and then decide how big of a place do you want/can you afford?
When you move out, you will find that you will have more bills to pay. You're gonna need to buy new furniture for the place. Bed, dinner table, couch, tv etc...
Once you buy and decide it is too small, selling it means you will take a hit as the seller pays the commission of the buying and selling realtors.
Buying pre-sale also means you pay more tax as opposed to buying an older unit.

JKam

07-18-2013, 03:33 PM

Because a pre-sale condo isn't a big price tag, unlike a house thats > X Million Dollars. A Pre Sale Condo can be paid off easily, under 6 Years, but might be tough on the first few years.

um.. Please tell me how you plan on paying off a $300,000 mortgage in 6 years on a $80,000 (pretax) household income?

Your household take home pay is probably 60-70k. What about strata fees, insurance, car, phone and food bills?

I know you're set on buying the condo but... what is your plan? I'm genuinely curious because I'm in a similar situation and there's no way I can afford a pre-sale/condo yet.

I'm just renting and saving until buying makes sense or I make more money lol.

i-VTEC

07-18-2013, 04:45 PM

Easy, Its not like we don't have a place to live, we are still living at our respective parents house. standard of living are all paid for. Car (Either Insurance/Gas, I dont drive a lot anyways) Phone bill, taken care by my company, Food by parents.

Pretty much all the income will be saved up $45,000 after tax is $36,000 * 2 = $72,000, I will be very kind, knock 22K off (other yearly spending between the 2) which = $50K saving per year, $50K Saving Per Year * 6 Years = $300,000

My Plan is Save Enough Money so I don't need to get a mortgage or only mortgage less than $100K. So you should do the same. Dino pointed out that getting mortgage and paying back in 20 or 25 years you actually pay back to the bank almost double the amount you borrow from the bank

No point of buying a place to live as high as now, yet still pay mortgage for that high amount. Rather Save Up, Eventually Price Goes down, then you probably will end up not mortgage anything. I'm buying its because I have a partner, while you are pretty much on your own

You Save Up and Make More Money and Wait all at the same time. I already researched that there will be at least 25+ high rise condos going to be built coming years. Keep in mind thats "Just" in Richmond and not counting low rise (4 floors one, they will be even cheaper). Also Oakridge is purposing 10 Condos around it. So just wait and be patient.

What Dino and Grid said were correct, if you are going to lock in Mortgage for 25 years it is actually very scary. Anything can happen in those 25 years. You can lower that 25 years to 10 or 15 years, but you are going to pay double the monthly payment which essentially 50~70% of your monthly income and that can be scary too.

Its not so scary for my case because, both me and my girlfriend are working and we are totally in different field, I'm in Software, she is in Medical @ Hospital, if anything I will likely to go down, because its not a government union job but at least we will still be fine making mortgage payment. Shes actually making more than me atm haha :p

um.. Please tell me how you plan on paying off a $300,000 mortgage in 6 years on a $80,000 (pretax) household income?

Your household take home pay is probably 60-70k. What about strata fees, insurance, car, phone and food bills?

I know you're set on buying the condo but... what is your plan? I'm genuinely curious because I'm in a similar situation and there's no way I can afford a pre-sale/condo yet.

I'm just renting and saving until buying makes sense or I make more money lol.

dinosaur

07-18-2013, 05:32 PM

So, I'm sorry...what is the point of this thread now?

It seems we started off with you wondering what interest rate you would get and now you are saying you are going to buy a house in cash while making 80,000/year because mommy and daddy are funding your mid-20-something life? Nice.

Your type of future is the one I fear for Canada. Lack of responsible over-aged children powered by parents, who, when the parents die won't be able to find their way out of a paper bag and will tank our economy by bankrupting themselves and foreclosures. Awesome.

This has been a huge waste of time....maybe some others will get some good info from all who contributed in this thread because I don't think you heard a thing.

Props to being a good troll, though.

tiger_handheld

07-18-2013, 06:31 PM

I have been working for almost 2 years(2 jobs) upon graduating.

I have no student loan debt, no car financing no lease

my annual salary, recently raised, to around $45,000

my gf, whos pretty much in the same situation as me and making $35,000 annually

we are thinking about buying a presale condo, 1 bedroom, around $320,000 range

and we have following questions:

1) since HST is cancelled, if the agreed price between me and the condo developer is $320,000 what % is the tax? still 12%?

2) getting a mortgage, We both are in the mid 20s, we don't really have a lot of credits (I do have MNBA CC and TD CC and goes with my gf) will banks approve us for a mortgage? even if it approve, it will likely to be really high interested rate? perhaps in the 10%? but if we were to get our parents to co-sign it, it will drop to like 3 or 4%? Also, does it just either me or my gf get the mortgage or we can both take the on load half, say I mortgage 50% respectively

3) benefit of first home buyer? i heard there are some benefits what are they?

4) should I get a Realtor?

5) insurance, I know for condos, a portion of monthly maintenance fee are for insurance. If I bought my condo at $320,000 and next year, earthquake hits, destroy my building, do I get full 100%(minus the depreciation value or based on the current market price) back?

Thanks

Easy, Its not like we don't have a place to live, we are still living at our respective parents house. standard of living are all paid for. Car (Either Insurance/Gas, I dont drive a lot anyways) Phone bill, taken care by my company, Food by parents.

Pretty much all the income will be saved up $45,000 after tax is $36,000 * 2 = $72,000, I will be very kind, knock 22K off (other yearly spending between the 2) which = $50K saving per year, $50K Saving Per Year * 6 Years = $300,000

My Plan is Save Enough Money so I don't need to get a mortgage or only mortgage less than $100K. So you should do the same. Dino pointed out that getting mortgage and paying back in 20 or 25 years you actually pay back to the bank almost double the amount you borrow from the bank

No point of buying a place to live as high as now, yet still pay mortgage for that high amount. Rather Save Up, Eventually Price Goes down, then you probably will end up not mortgage anything. I'm buying its because I have a partner, while you are pretty much on your own

You Save Up and Make More Money and Wait all at the same time. I already researched that there will be at least 25+ high rise condos going to be built coming years. Keep in mind thats "Just" in Richmond and not counting low rise (4 floors one, they will be even cheaper). Also Oakridge is purposing 10 Condos around it. So just wait and be patient.

What Dino and Grid said were correct, if you are going to lock in Mortgage for 25 years it is actually very scary. Anything can happen in those 25 years. You can lower that 25 years to 10 or 15 years, but you are going to pay double the monthly payment which essentially 50~70% of your monthly income and that can be scary too.

Its not so scary for my case because, both me and my girlfriend are working and we are totally in different field, I'm in Software, she is in Medical @ Hospital, if anything I will likely to go down, because its not a government union job but at least we will still be fine making mortgage payment. Shes actually making more than me atm haha :p

So, I'm sorry...what is the point of this thread now?

It seems we started off with you wondering what interest rate you would get and now you are saying you are going to buy a house in cash while making 80,000/year because mommy and daddy are funding your mid-20-something life? Nice.

Your type of future is the one I fear for Canada. Lack of responsible over-aged children powered by parents, who, when the parents die won't be able to find their way out of a paper bag and will tank our economy by bankrupting themselves and foreclosures. Awesome.

This has been a huge waste of time....maybe some others will get some good info from all who contributed in this thread because I don't think you heard a thing.

Props to being a good troll, though.

Dino/Grid/Others - thanks for the info! Much appreciated.

What are the general thoughts about buying a condo out side of vancouver proper (so burnaby, langley , surrey) (non-presale) and renting it for a year or two while living at home?

MindBomber

07-18-2013, 06:44 PM

dinosaur

07-18-2013, 07:22 PM

What are the general thoughts about buying a condo out side of vancouver proper (so burnaby, langley , surrey) (non-presale) and renting it for a year or two while living at home?

There is no difference. Market is the same everywhere, you just need to scale it.

I have viewed ALL pre-sales in New West....all are above $280k unless you are looking at "jr. suites". Re-sale condos are no different...they may be slightly cheaper, but the stratas are WAY higher....think $400-$500/month. ON TOP of your mortgage.

Maybe be a bit less than Vancouver, but you will need to rent for less. And, if I am being honest, the rental market SUCKS right now. Conservatively, you could take a NEW one bedroom condo in New West and rent it out for about $1100...maybe. Most likely $1000. Between strata, taxes, and mortgage, you will be revenue negative.

Here is what you need to understand. EVERYONE who has these thoughts need to understand this....this is going to blow your mind.

People in the 20s and 30s DO NOT and SHOULD NOT buy real estate as an investment.

Unless you have won the lottery...received a LARGE inheritance....been gifted $200k+, you should not be considering purchasing a condo for an investment.

What is with this generation living and acting like they are rolling in it and trying to replicated their parents' wealth at a young age in one of the most expensive cities in the world?

How do you expect to have any grasp of reality when you don't even pay a cable bill?

You can't have it all and you can't have it now! How do you think your parents are where they are now? Because when they were 25 they were working their ass off. They had their heads down, nose to the grind stone, saving every penny, living VERY conservatively, etc. Their houses/apts/shacks they bought or rented were pieces of shit. There was no option to "upgrade" to the stainless package, there was no concern in regards to view, and they certainly didn't give a shit about the wall colour.

Y'all need to stop. Y'all need to stop thinking money grows on trees. Y'all need to stop thinking that banking 100k a year is feasible. Y'all need to sit bank and realize that dropping $350k on 500 sq ft is ridiculous! And, what is even more ridiculous is that y'all are sitting here and thinking this is a good "investment".

The bank our parents made in real estate will not happen to you. Your $350k "investment" will not turn into $700k in 20 years. Our parents bought land. There is no land to buy now so why try and buy something just to say you own it. I get it...I've been there...bought the t-shirt...sent the post card and now I am sitting on an almost brand new townhouse that it worth $20k less than what I bought it for.

These stories on the news on how shit is selling and the market is awesome are fallacies. Realtors are fucking the numbers by re-listing the property at a lower amount when they aren't selling for higher. This fucks the stats.

Don;t take this as me shitting on realtors....i have realtor friends and have always had a great experience when dealing with them myself, but don't kid yourself. They need the market to pick up more than you because it is their life. But don't think for one second that our housing market is awesome right now, because it ain't.

I have never in my life encountered so many "I want to buy a condo" people than I have since I have joined RS....did I miss that on the sign-up page? Was there a box I didn't tick? The future of this Province terrifies me...

skiiipi

07-18-2013, 07:40 PM

There is no difference. Market is the same everywhere, you just need to scale it.

I have viewed ALL pre-sales in New West....all are above $280k unless you are looking at "jr. suites". Re-sale condos are no different...they may be slightly cheaper, but the stratas are WAY higher....think $400-$500/month. ON TOP of your mortgage.

Maybe be a bit less than Vancouver, but you will need to rent for less. And, if I am being honest, the rental market SUCKS right now. Conservatively, you could take a NEW one bedroom condo in New West and rent it out for about $1100...maybe. Most likely $1000. Between strata, taxes, and mortgage, you will be revenue negative.

Here is what you need to understand. EVERYONE who has these thoughts need to understand this....this is going to blow your mind.

People in the 20s and 30s DO NOT and SHOULD NOT buy real estate as an investment.

Unless you have won the lottery...received a LARGE inheritance....been gifted $200k+, you should not be considering purchasing a condo for an investment.

What is with this generation living and acting like they are rolling in it and trying to replicated their parents' wealth at a young age in one of the most expensive cities in the world?

How do you expect to have any grasp of reality when you don't even pay a cable bill?

You can't have it all and you can't have it now! How do you think your parents are where they are now? Because when they were 25 they were working their ass off. They had their heads down, nose to the grind stone, saving every penny, living VERY conservatively, etc. They houses/apts/shacks they bought were pieces of shit. There was no option to "upgrade" to the stainless package, there was no concern in regards to view, and they certainly didn't give a shit about the wall colour.

Y'all need to stop. Y'all need to stop thinking money grows on trees. Y'all need to stop thinking that banking 100k a year is feasible. Y'all need to sit bank and realize that dropping $350k on 500 sq ft is ridiculous! And, what is even more ridiculous is that y'all are sitting here and thinking this is a good "investment".

The bank our parents made in real estate will not happen to you. Your $350k "investment" will not turn into $700k in 20 years. Our parents bought land. There is no land to buy now so why try and buy something just to say you own it. I get it...I've been there...bought the t-shirt...sent the post card and now I am sitting on an almost brand new townhouse that it worth $20k less than what I bought it for.

These stories on the news on how shit is selling and the market is awesome are fallacies. Realtors are fucking the numbers by re-listing the property are a lower amount when they aren't selling for higher. This fucks the stats.

Don;t take this as me shitting on realtors....i have realtor friends and have always had a great experience when dealing with them myself, but don't kid yourself. They need the market to pick up more than you because it is their life. But don't think for one second that our housing market is awesome right now, because it ain't.

I have never in my life encountered so many "I want to buy a condo" people than I have since I have joined RS....did I miss that on the sign-up page? Was there a box I didn't tick? The future of this Province terrifies me...

I'm wondering about potentially purchasing a property in the Okanagan....namely Kelowna by UBCO
A colleague of mine purchased a 2500 sqft home on a 9000 sqft lot with a legal basement suite for 450K. He is renting his basement suite for $1000/month, while living in the main floors with his family.

I will actually be moving up north for work in the next 3 years, but currently do have some money saved in the bank that I can put towards a down Payment.
Would this be a good investment? I'm guessing that if I rent the top and bottom suite I would be able to cover mortage and perhaps makes a few hundred per month on top.

I would be able to put approx 20-25% down on a 450K unit while mortgaging the rest.....the reason why i'm considering this is currently my savings isnt really getting me much interest and I think housing in the Okanagan might be a safer investment than investing in stocks or bonds as I am not an expert in those areas either. also cause I've been watching the show 'income property' on hgtv for the past few month, and seems like a good idea to be able to make money on a house and cover the mortgage.

Lastly, while I have no plans of living in Kelowna for the next little while, it would make a great retirement home down the road.

would this be a good investment, and how much a property manager charge to manage the property in terms of helping me select tenants and collect rent (I heard it was 1 months rent?)

btw, this thread has been extremely helpful.

dinosaur

07-18-2013, 08:10 PM

IMO, Okanagan pricing is where Lower Mainland pricing should be so for that region, it is over priced. More affordable, but over priced.

Rental market in the OK is vastly different than it is here and without doing the numbers, I would say that is a better place to buy instead of rent (Lower Mainland you should rent NOT buy). $1000 for a shitty 1 bedroom apartment is standard. That being said, it doesn't mean you should. Buying land is always good, but you have less of a market there. I know and have known several people who move to Kelowna and Kamloops for work...but it is a specific type of work. UBCO is a good intensive, but is it worth a $500k investment? Maybe not.

Having basement refugees (or basement suite tenants) is always a good option....but it can be a huge pain in the ass:

-They don't pay rent
-They trash the place
-They don't pay rent AND trash the place
-The suite is vacant

So, you have a $450k mortgage for a vacant house AND you are paying a property management company to deal with it....oh, and its a 5 hour drive away. Not cool.

I'd much rather take my money to a financial advisor if you are worried about how much your money is making. Taking my money and becoming a first time home buyer for an investment 5 hours away would make me shit bricks.

Income Property is a dope show and Scott McGillivray makes this shit look like a 5-year old's party at McDonald's. However, this shit is filmed in Ontario so its TOTES different than BC...also, these people use these suites as mortgage helpers NOT investments.

My "investment" (which was NOT suppose to be an investment) keeps me up at night and its 20 mins away. I have heart palpitations every a tenant gives notice....having to pay A LOT for a property to sit empty ain't cool. And, even when I do get tenants....will they turn it into a meth lab?

Again, I need to say....when did our (20s-30s) generation start getting a chubby over investing in property?? I don't get it...

Gridlock

07-18-2013, 08:10 PM

Working backwards:

1. If you are planning on your retirement now(different than planning FOR it) then you have a sad 30-40 years of waiting
2. One month rent and 6-8% per month for the life of the contract.
3. While Income Property is good tv, I wouldn't use it as a basis for quality investment advice. The numbers don't work here because the rents are the same, but our properties are more
4. You want to be 5 hours away from your property. Can I rent it? After watching Breaking Bad, I have this overwhelming urge to cook meth. You hear me NSA?

So yeah, I don't know if all the above came across as excited for the idea...but yeah, sounds great!

Backing up and even taking in a little bit of what Dino said.

There is a difference between now, and 2003. Everyone was coming off a dot com bubble and said, "fuck yeah, that was fun! I was a day trader making bank for nothing."

and then they said, let's do it again.

HGTV starts. Let's flip houses!

Pre-sales explode. Selling out a building in a day. Companies are rescinding offers to re-sell at higher prices(remember that happening?) You can sell an assignment for profit.

Hell...keep that shit and rent it out!

Then you own rental property, and you're now banking 10-20% equity gains in a year. Fucking nuts. It keeps going up.

That, THAT was when buying an investment property worked out.

Guess what kids. Party is over. It's done. We've met the max on the market. So buy in if you want or feel you must. Maybe I'm wrong. It's possible. It's happened MANY times before.

Just because we've come off an epic run(and trust me, I wish I was in on it. I really do) but just because there was an epic run, it doesn't mean there always will be.

We are in for a decade of ups and downs. Everyone grabbed their ass cheeks in '08, and it was ok. Everyone is kind of looking around seeing whats happening now. US was in the dumps a year ago, and now they are doing ok. Up and down, up and down. jobs will be gained, and they will be lost. For 10 years.

But don't worry, Christie said by that time we'll be debt free and high off natural gas, so we have that to look for :)

Gridlock

07-18-2013, 08:11 PM

will the turn it into a meth lab?

urge to cook meth.

I think we have an obsession.

Posted within minutes. Damn you Breaking Bad!

Vege

07-18-2013, 08:26 PM

I think you and your GF need to see if you are both capable of living on your own first. You sound like most young people these days who have never been financially stressed before because everything is taken care of by their parents.

It all sounds nice to be a homeowner but you are forgetting all the other details. Besides the mortgage payment, I would assume you plan to have life insurance on each over to cover any unexpected life events. RRSP and TSFA contributions as you don't want to dump all your assets on your pre-sale condo that most likely drop in value due to market over saturation. Strata fees will go up and they do tend to go up every single year even on brand new condos. BC Hydro/FortisBC bills, property tax, city utility bills, cell phone bills, house insurance, tv cable/internet bills, car insurance and costs for food.

This is the biggest financial decision of your life and I would suggest sitting down and really looking at the financial side of things before jumping in. There are many people on RS that have been through this same situation and have valuable experience you can learn from.

I bought my first brand new condo in Coquitlam in 2007 for $280k. One year later, I was stressed out of my mind as 4 new condo developments were completed in the same area and my condo dropped 50k instantly. I took a huge hit when the market crashed in 2008 and was lucky to get out with a loss before prices hit rock bottom. I was fortunate enough to flip to a older house in North Delta and was able to recoup my costs a few years later as SFD definitely maintained their value.

And yes, the market is not good right now. Anyone in the real estate field will always paint a good picture as their livelihood depends on good news. I would be looking at SFD's right now if you have saved up a big enough down payment.

Also trying to rent out your place is a lot more work than you think. Just ask Dino and Gridlock ;)

dinosaur

07-18-2013, 08:38 PM

I bought my first brand new condo in Coquitlam in 2007 for $280k. One year later, I was stressed out of my mind as 4 new condo developments were completed in the same area and my condo dropped 50k instantly. I took a huge hit when the market crashed in 2008 and was lucky to get out with a loss before prices hit rock bottom. I was fortunate enough to flip to a older house in North Delta and was able to recoup my costs a few years later as SFD definitely maintained their value.

This This This This OH SOOOOO This!!!!

noclue

07-18-2013, 10:48 PM

I'm wondering about potentially purchasing a property in the Okanagan....namely Kelowna by UBCO
A colleague of mine purchased a 2500 sqft home on a 9000 sqft lot with a legal basement suite for 450K. He is renting his basement suite for $1000/month, while living in the main floors with his family.

I will actually be moving up north for work in the next 3 years, but currently do have some money saved in the bank that I can put towards a down Payment.
Would this be a good investment? I'm guessing that if I rent the top and bottom suite I would be able to cover mortage and perhaps makes a few hundred per month on top.

I would be able to put approx 20-25% down on a 450K unit while mortgaging the rest.....the reason why i'm considering this is currently my savings isnt really getting me much interest and I think housing in the Okanagan might be a safer investment than investing in stocks or bonds as I am not an expert in those areas either. also cause I've been watching the show 'income property' on hgtv for the past few month, and seems like a good idea to be able to make money on a house and cover the mortgage.

Lastly, while I have no plans of living in Kelowna for the next little while, it would make a great retirement home down the road.

would this be a good investment, and how much a property manager charge to manage the property in terms of helping me select tenants and collect rent (I heard it was 1 months rent?)

btw, this thread has been extremely helpful.

Look outside lower mainland/Okanagan if you are desperate for real estate now.

I own properties in northern BC, in a city that start with the word 'Prince' they are doing great due to the boom of LNG, Mining, Forestry, UNBC med/cancer centre, 3 pipelines proposed etc. Cost of living is cheap there and unemployment rate is low. For example you can get a new house in the range of 370-510K.

However you better like pick up trucks and horrible Asian restaurants, jesus christ $18 for 3 rolls that are worse than what you get at an AYCE here!