Friends
We are was looking to buy new home, (Planning phase) I am thinking it is good idea to avoid CMHC by making 20% DP. However based on different views. Is it really good to put all your money just to remove CMHC insurance ( by downing 20%) and then have little or short of money for any emergency funds eg : closing costs/furnitures/moving etc. or any other personal emergencies.
I was thinking in misssissauga or milton freeholding townhouses. any thoughts/suggestions.
Location: God's own country
Posted on: 03-07-15 05:29:11
It is your choice based on your situation. There are pros and cons of each move.
Further point that can help you make a decision is :
1. Interest rates will go up soon.
2. You can get a secured line of credit (at low interest rates) based on your house for any immediate financial needs.
That being said, I am not for buying a free hold townhouse due to the following reasons :
1. Very slow rate of appriciation when compared to detached houses, semi detached.
2. There has been a possibility that if you are stuck in the middle house and your neighbours are bad people, you will loose your peace of mind.
That being said, it is your choice and based on your curcumstances. If you are a first time buyer with a very tight budget, then townhouse is better than renting.
Always buy a house having the option of an external (as well as internal) access to the basement. You can rent the basement out to suppliment your mortgage payments.
Mississauga is the first option. Milton would be my second.
Murali
-----------------------------------------------------------------
I am a Gents and not a Ladies.
Thank you Sir for your thoughts. Is it good to go after 20% or just do 10 or 15% and keep balance amount for emergencies especially if it single earner.
Location: God's own country
Posted on: 03-07-15 10:07:46
You are the best person to decide it based on your family circumstances.
If in doubt, discuss with an independant mortgage broker who is not interested in your business so that he will give you a clear idea.
Murali
-----------------------------------------------------------------
I am a Gents and not a Ladies.
When I bought my first home job was very unstable and being single earner in family I kept a good cushion in bank . I did paid CHMC fees but when included that in mortgage it added dimes in mortgage installment . I din't trade my piece of mind for extra few dollors .
IMO there is no right or wrong choices as each situation is unique when it comes to mortgage . Don't forget to explore STEP Mortgage ( product of Scotia ) and its benefits before you finalize .
Quote:
Originally posted by MAK3
Friends
We are was looking to buy new home, (Planning phase) I am thinking it is good idea to avoid CMHC by making 20% DP. However based on different views. Is it really good to put all your money just to remove CMHC insurance ( by downing 20%) and then have little or short of money for any emergency funds eg : closing costs/furnitures/moving etc. or any other personal emergencies.
I was thinking in misssissauga or milton freeholding townhouses. any thoughts/suggestions.
-----------------------------------------------------------------
Growing Old Is Mandatory ..Growing UP is Optional
Quote:
Originally posted by MAK3
Friends
We are was looking to buy new home, (Planning phase) I am thinking it is good idea to avoid CMHC by making 20% DP. However based on different views. Is it really good to put all your money just to remove CMHC insurance ( by downing 20%) and then have little or short of money for any emergency funds eg : closing costs/furnitures/moving etc. or any other personal emergencies.
I was thinking in misssissauga or milton freeholding townhouses. any thoughts/suggestions.
--------------
Normally when you borrow to buy a house and a Bank or a Financial Institution lends you the money on these mortgages, they pay a Housing Corporation called CMHC the premium, if and when the Down Payment falls below or equals 20% of the value of the property. You can see the Premium amount to be paid on their website. Look into the location How Much Does CMHC Mortgage Loan Insurance Cost? You will have to fill in the amounts and also the Amortization period the lender will permit you. (currently)
This amount is paid by the lender to CMHC. But they do not want to get slapped with it. So, they tack it onto the Mortgage and then Amortize it and you end up paying this over a period of time and some times it might amount to 10 times the interest that you owe them. It means there is no end to it. It is currently 3.6% or there about. The lender should tell you or the lawyer who closes the deal will point it out to you at the time of signing and taking over the property.
Just a word of Caution, before you commit yourself to purchase, go and see a good lawyer and pay him if it needs be, because he will explain all the subtle details to you. Some might not even charge you if you close the deal through them.
Here is my take on the Housing Market as it stands TODAY. It is a very volatile market and though it looks like it has been moving upwards steadily, there comes a time where you see the peaks. The peak it should have reached was YESTERDAY. If it did not reach it, then, it is on its way down, from there. So, be informed, that we will not see any more higher prices from today.
So, you should wait for another year or two or even more before you dip your toes into the stream. OR you should wear GALOSHES, just to keep yourself from getting drowned.
Everyone will say you make the decision. I will provide you just a little help in your purchase with my decision... Put off buying any property for now.
Hope you hear me and my word of caution.
FH.
Your money is in your pockets. CASH IS KING.
EDIT. : http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/would-you-be-better-off-financially-renting-or-buying-a-home/article11952313/
As of today, Canada is one cent away from recession. The dirty "R" word.
Quote:
Your money is in your pockets. CASH IS KING.
EDIT. : http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/would-you-be-better-off-financially-renting-or-buying-a-home/article11952313/
As of today, Canada is one cent away from recession. The dirty "R" word.
Totally agree with this.
Buying is not always the best option.
Expenses with house ownership.
Considering your case -
For townhouse you are looking for 400-500K range.
Property Tax - 300
Utility - 300
Insurance - 100
Maintenance charge - 200
Interest on mortgage - 600
---
Total - 1500
Suppose you are paying X$ in rent.
If the price of house appreciate, then good, else suppose if the price in future is same as today then you are loosing (1500-x)$ every month.
