financing for a house
- Thread starter jw01
- Start date
Well let's see. Suppose you have $180k and instead of buying a home you decide to rent, and lend the $180k out to some idiot who needs a mortgage on a 2nd home so he can do some renovations and flip it three years later. For a secondary residence you'd probably get at least 5% per year on your $180k mortgage with Mr. Flip, which would be about $27k in your pocket, while he landed himself $32k doing lots of hard manual labour, but only after putting in $10k of his own cash. Seems to me you're about $5k up on Mr. Flip there, not to mention you actually got a vacation while he spent all his free time working on the house.
congratulations
1. you had no guarantee that your sale price was going to be higher than the purchase price ... you could just as easily lose money, or have been unable to make the sale
2. how much was your time worth? if you enjoy being mr. home improvement, never mind (not all people like that stuff)
If you think real estate is expensive in Toronto, check out San Francisco.
I was there premeltdown and I'm telling you, I was flabergasted as to the price of real estate there. I'm not joking when I say a 1,400 ft^2 bungalo was 1.3 million.
Just out of curiousity, I googled SF real estate prices. They still appear to be way more expensive than T.O. Hugely so.
And SF is not half the city Toronto is. It's population is less than a million I believe, though the metropolitan area (BAy Area) is slightly larger than the GTA.
Anyway, check out this link to SF real estate prices.
http://www.trulia.com/home_prices/California/San_Francisco-heat_map/
Toronto doesn't even come close. And these are recent prices.
I was there premeltdown and I'm telling you, I was flabergasted as to the price of real estate there. I'm not joking when I say a 1,400 ft^2 bungalo was 1.3 million.
Just out of curiousity, I googled SF real estate prices. They still appear to be way more expensive than T.O. Hugely so.
And SF is not half the city Toronto is. It's population is less than a million I believe, though the metropolitan area (BAy Area) is slightly larger than the GTA.
Anyway, check out this link to SF real estate prices.
http://www.trulia.com/home_prices/California/San_Francisco-heat_map/
Toronto doesn't even come close. And these are recent prices.
If Toronto could attract industries that pay the kinds of salaries on offer in the valley, then we would see the same crazy prices here.
Last I checked, though, we didn't have the equivalent of Apple, Google, Oracle, HP, and Cisco, plus many others, all concentrated in our area. All we've got is RIM, over in Waterloo, and it's not doing so well these days.
Not that we would WANT that. Some of the problems faced by Bay Area residents are things like trouble getting good teachers into their schools, because you can't afford to live there on a teacher's salary. Similar problems with police, fire, etc., maybe not as bad as back in the boom era, but it's not necessarily healthy to have such a huge concentration of high salaries all in one place.
Conversations with frustrated parents when I lived there. From the valley it was something like a two hour commute--each way--to a home that a teacher could afford. We're talking about a place where $70k is considered a starting salary, and $150k salaries are common. It's those high tech salaries that drive up the real estate around there. Everybody wants a short commute, but some can't afford it.
You do realize CA is the 6th largest economy in the world? Even with their $20bn deficit? That Toronto is no SF. At best, Toronto is a wannabe NYC, no more. So imho, comparisons with SF market are not relevant.
All you have to see is: how many of the units being sold here are 5% down vs 20% down and that'll tell you the ability of the local population to afford the units. The rich Chinese aren't buying up Toronto contrary to perception.
All you have to see is: how many of the units being sold here are 5% down vs 20% down and that'll tell you the ability of the local population to afford the units. The rich Chinese aren't buying up Toronto contrary to perception.
Nice try.
Toronto outclasses SF at every turn (though I do like SF)
Toronto is leading North America in terms of Sky Scraper construction. There are more sky scrapers under construction than in NYC and Chicago COMBINED.
Other than NYC, there are more skyscrapers in Toronto than any other city in North America. SF isn't even on the charts.
This is not a slouch city - sorry to disappoint.
oh i know and that's my downpayment amount. But i wanted to know:
a. Won't the banks give me a $400k mortgage because i make 100k?
b. How many people are putting 20% (which eliminates need for CMHC insurance)?
I'm sorry? I don't understand? Sky scrapers of dubious quality (I live in one) are now criteria for measuring a city's stature?
However this is about SF real estate and Toronto real estate, right? Population is more in SF Bay Area by a couple of million at the least. GDP of SFBA is $450B vs $320B for GTA. Property taxes are capped at 1% in CA. Mortgage interest write offs are an added way of reducing cost of home ownership in SFBA. These GDP numbers are off Wikipedia btw.
My point: if you're seeing overpriced real estate in SF, chances are given certain factors (mortgage write off being key), it's still more affordable than Toronto.
a. No
b. I put down 25% (honestly). You get a much better interest rate as no need for CHMC insurance.
OVer the last 30 years long term bonds have averaged 11 percent, outperforming stocks in return, risk adjusted return, etc etc. BUT interest rates have declined steadily over all that time down to Zero. Real Estate has done OK over that period of time, and fabulously over the last 7-8 years. Does it continue? Does anyone expect interest rates to be lower 7,8,..10 years from now??? The world is all about long term trends. Rates are going up soon or later, and costs of home ownership increase every year(realty taxes, heating, and hydro will get ridiculous) I can't help but think, complacency leaves us to believe that real estate in Toronto will continue to rise in price, but home prices here will probably go nowhere over the next 10-15 years. Everything has worked for our parents. They graduated college and univers and got jobs right away, they put money in the bank and got paid 7%, they bought real estate and home values increased. Inflation bailed the world out time after time after time. Will it happen again? Complacency would dictate yes....somehow, I don't think so.
Oh the immigrants are coming in with Cash and buying everything up...with CASH?..I don't think so. CMHC wouldn't agree. Foreigners with 5% down will be the first to walk away from their investment condos...good luck suing them in Hong Kong or Russia???
As long as you're on the subway line your real estate is safe? Why, cause the overloaded TTC is going to be great once 20 000 more condos go up along the TTC line??
Oh the immigrants are coming in with Cash and buying everything up...with CASH?..I don't think so. CMHC wouldn't agree. Foreigners with 5% down will be the first to walk away from their investment condos...good luck suing them in Hong Kong or Russia???
As long as you're on the subway line your real estate is safe? Why, cause the overloaded TTC is going to be great once 20 000 more condos go up along the TTC line??
Depending on how much you have for a down payment, going with a sub prime lender at a little bit higher of a rate than a bank would give you would be an option...I'm in Real Estate, if you want i can put you in touch with a few good mortgage brokers i know...Its always worthwhile going to a broker as they'll look into a list of companies and see what each one can offer you, if anything, as opposed to going to a single financial source.
Send me a pm if you like, i'd be happy to help.
these guys are really good:
www.monstermortgage.ca
ask for vince. he does the CP24 talk show, and tell him you got referred by a guy off terb.
www.monstermortgage.ca
ask for vince. he does the CP24 talk show, and tell him you got referred by a guy off terb.
Probably not, my wife and I bring in around 100k, have excellent credit ratings, little debt, limited credit in credit cards and loc, 1 car loan on the go for about 20k at the time and only qualified for 300k. We did put down 20 % in order to not pay the fee to CMHC. Fortunately we had a bidding war on our old place.
