Quote:
Originally Posted by tool001
thanks for all the info...
i know market is going to go down..but i dont see it going down to 2006 rates,, i had the funds and wanted to move outta where i am plus found something that i actually like.
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NP
Since you agree prices are going to go down, yet not alot, consider this.
On a 25yr mortgage with 20% down at 2.25% you'll pay down 15% of the mortgage over 5 years. If prices go down 10%, when you sell after 5 years you'll pay 5% commission, and you've effectively wiped out all the equity you saved.
Net result: +15% - 10% - 5% = 0% gained
Lets say you put down 10%, you incur a 2% CHMC fee.
Another 2% lost
Lets say you put down 5%, you incur a 2.75% CHMC fee.
Or 2.75% lost
Lets say you sell before 5 years and incur the 1% mortgage termination fee.
Another 1% lost
Lets say rates go up 2% over 5 years, meaning you only paid down 13% not 15% of the equity.
Another 2% lost
So in theory, if you only put down 10%, rates go up 2%, you break the mortgage before 5 years, pay the 1% penalty, and you pay a 5% Realtor commission - house prices only have to go down (13 - 1 - 2 - 5) 5% before you're losing money.
And none of that considers lawyer fees, moving fees, land transfer tax, or maintenance.