{Mortgage} How much is too much?

[Whiplash7828]

I know there are plenty of calculators out there, but what's your rule of thumb?

I am what one would call...an overly cautious financial planner...Do any of you plan what-if scenarios (like job loss, or salary cuts? how about drastic salary drops like 50%?).

In any case...how much is too much mortgage?

[pitz]

I don't do 'financial planning', but I think a good rule of thumb is one should have enough of a downpayment to not need mortgage insurance. That means 20-25%.

The idea is that "the government", in setting the 20/25% rule, has generally determined that this is a 'safe' amount of capitalization and/or financial leverage to use to purchase a single family residential home or condo.

House prices are unlikely to, in the future, be boosted substantially by the dramatic interest rate declines seen of the past decade, which have provided a 6-8% annual boost in valuations (in addition to normal inflationary adjustments). That golden goose is dead. So those no-money-down players are really playing with fire now.

[89fan]

That question varies for everyone.
For myself and my fiance, we were offered 6times our gross annual income. Our mortgage is 3x our annual gross income (not including OT/bonuses/profit sharing).

We only put down 5%, as we really did need new furniture for the entire place, and new appliances. We would have put down more but I persoanlly never realized how expensive funiture and appliances were.

We feel comfortable with our amount as we have NO debt, and we do not plan on having children.

I sat down and made a detailed monthly budget that includes mortgage, utilities, taxes, insurance (car/home/life), gas for car, car maintenance, RRSP, savings, groceries, our monthly allowances, cable, phone, internet, cell, gifts, condo fee, bus pass, clothing, prescriptions/contact lens, entertainment..well you get the point.

At the end of every month we are left with $1,000 after all of this!
We have also left ourselves with a $17,000 buffer, which would cover almost 2 years if 1 of us lost our job (not including the EI we'd get), and just in case something happens with our car.

[nalababe]

Bought house with 80k down on 320k. Refinanced several years later and ended up with a 300k mortgage on an appraised value of 420k. After renovations, the appraised value is closer to 500k. Now less than a year later value is closer to 550-600k.

Our mortgage is about 1700 a month. This is less than 1 paycheck a month (out of 4).

[Whiplash7828]

didn't really want this thread to turn into a bragging session...looking for real advice on how to assess one's ability to afford a given mortgage. What fictional scenarios did you plan for?

For reference, our mortgage will be 1.75 times our yearly income. No debt whatsoever except an inexpensive car (300 per month). To me this seems more than reasonable, but I'm still getting jitters as this is our first home.

[Crowbarfoot]

Generally the "rule" is 3X your incomes.

1.75X with little debt and you should be very comfortable. Lots of funds left over for savings or renos.

We are a little less than 2X our incomes with just some minor debts and find it fine.

Grats on the house. The pleasure of owning your own house will quickly overcome the jitters.

~C

[Thalo]

I think "too much" is anything requiring more than a 25 year ammortization. If you can't be approved for the mortgage with 25 year ammo, then it is too much for you.

[Jero]

didn't really want this thread to turn into a bragging session...looking for real advice on how to assess one's ability to afford a given mortgage. What fictional scenarios did you plan for?

For reference, our mortgage will be 1.75 times our yearly income. No debt whatsoever except an inexpensive car (300 per month). To me this seems more than reasonable, but I'm still getting jitters as this is our first home.

The one question that I had to ask myself was how much can you afford after deducting all expenses. I actually track my spending patterns to get 'real' numbers. My mortgage was 2.5x annual salary. I felt this was achievable based on my actual spending pattern and made sure I wasn't too tight. It also helps that I used my RRSP for the deposit and setup a weekly mortgage payment schedule since I get paid weekly.

Since you have no debt, you should be OK as long as you feel secure with your JOB:)

[Sylvestre]

There are so many factors in play here. In our particular situation we bought a condo that we knew we'd keep and rent out later thus our 2nd place will be paid for without any accrued gain from the condo. As such, we went with a mortgage on our condo that's ~1.4x our gross.

This worked for us only because we can aggressively save for a large downpayment on our next place (in ~2 yrs) while still doing okay paying off the condo.

[don242]

The one question that I had to ask myself was how much can you afford after deducting all expenses. I actually track my spending patterns to get 'real' numbers. My mortgage was 2.5x annual salary. I felt this was achievable based on my actual spending pattern and made sure I wasn't too tight. It also helps that I used my RRSP for the deposit and setup a weekly mortgage payment schedule since I get paid weekly.

Since you have no debt, you should be OK as long as you feel secure with your JOB:)

I think this is the key. Use real numbers as opposed to a percentage of your income. You want to see how much money you have left over each month after your mortgage is paid. Then determine if that amount is sufficient for your lifestyle, requirements and savings. If you need $2000 a month for all of your expenses and savings goals (excluding your mortgage) then this will determine how much mortgage you can take on. This amount is a fixed requirement and should not be based upon a percentage of your income.

[89fan]

didn't really want this thread to turn into a bragging session...looking for real advice on how to assess one's ability to afford a given mortgage. What fictional scenarios did you plan for?

For reference, our mortgage will be 1.75 times our yearly income. No debt whatsoever except an inexpensive car (300 per month). To me this seems more than reasonable, but I'm still getting jitters as this is our first home.

Not sure if you were referring to me but I certainly wasn't bragging about anything:confused:

Just trying to point out that if you carefully budget for everything you will be fine. 1.75 is nothing! If you plan on having kids budget for them (Daycare is $$$$). Most couples I know got approved on 1 income as the women will be taking time off to have the kids.

Nobody can assess whether or not you can afford this mortgage ONLY YOU can! If you're not comfortable with 1.75x your income then get a smaller mortgage.

[Whiplash7828]

Not sure if you were referring to me but I certainly wasn't bragging about anything:confused:
I was not.

You bring up good points. Should be noted that I live in QC (where daycare costs 7$/day).

I do budget everything with actual numbers...and have approx. 2k/month left to put on savings or anything else...but you see I said I was a cautious planner. I tend to make sure I would be ok even with 2/3 of my salary...which would make this mortgage much tighter...achievable, but tighter. Does anyone else do scenarios like this?

[nalababe]

didn't really want this thread to turn into a bragging session...looking for real advice on how to assess one's ability to afford a given mortgage. What fictional scenarios did you plan for?

For reference, our mortgage will be 1.75 times our yearly income. No debt whatsoever except an inexpensive car (300 per month). To me this seems more than reasonable, but I'm still getting jitters as this is our first home.

its not about bragging, it is explaining with a real world example of how one can comfortably use a mortgage and not try assign some arbitrary multiple. I could care less what the multiple is, but what I do want is to know 1) only one paycheck out of four is going to the mortgage. 2) if we had to pay 50% more on the mortgage could we? Yes.

Remember, you will be increasing salary on a regular basis. What seemed like a lot a few years ago, might be quite minimal today. Over the 7 years we have lived here, both of our salaries have essentially doubled.

Also, when we increased the mortgage, we also had them provide a 40k credit line...just in case we ever are in an emergency.

[nalababe]

One other thing to consider is how you perceive debt. For example, I have 50k in RRSP and 20k on a credit line. For some they would want take out from the RRSP and eliminate the credit line. I don't see it that way. My return for the RRSP is greater than the interest on the credit line.

As long as I see the net worth increasing (excluding the house), I am ok.

Final thought, is that if you are worrying too much then it is probably not "right" for you at this time. You should be comfortable with your decision. Since this is a first house, if you are worried, scale back. No one is suggesting that you have to stay here the rest of your life.

[Freak]

I was not.

You bring up good points. Should be noted that I live in QC (where daycare costs 7$/day).

I do budget everything with actual numbers...and have approx. 2k/month left to put on savings or anything else...but you see I said I was a cautious planner. I tend to make sure I would be ok even with 2/3 of my salary...which would make this mortgage much tighter...achievable, but tighter. Does anyone else do scenarios like this?

Honestly you WILL know what is too much for you. Banks and most likely mortgage brokers as well, will approve you for a higher mortgage which you probably can't confortably afford. You need to think about all the things you need to pay once you get your house. Monthly bills can really add up.

I can say also that I am not a very disiplined with my money...if I have it I will spend it. So in my case I like carrying a larger mortgage because I feel in the end I will do what I have to do to pay my mortgage (which is also an investment) and spend less money.

When I bought my first house (7 years ago) I was really worried. I hadn't been working at my job very long, and was only making a decent wage. I ended up (after closing costs, and paying a delayed down-payment) getting a mortgage for $150,000...which at the time was a stretch. Myself and my wife made it work, and now we are looking to sell as we have purchased a new house. In the end stretching what I could afford and getting a slightly bigger mortgage has helped us a lot financially. When I sell I am expecting to make approx. $90,000 on my house (over the 7 years). I'm now turning that around and buying a new home that is worth more than twice what my original home was...for only a slightly bigger mortgage.

I think that you need to decide what your end goals are as well. You already stated that you do not plan to have kids, but do you plan to live in this place for the rest of your life or is this a starter home? Are you looking at it as an invesment as well? I'll say it again, I wouldn't worry too much as most people tend to do what is necessary to make things work and in the end I think you are rewarded for that.

[89fan]

I was not.

You bring up good points. Should be noted that I live in QC (where daycare costs 7$/day).

I do budget everything with actual numbers...and have approx. 2k/month left to put on savings or anything else...but you see I said I was a cautious planner. I tend to make sure I would be ok even with 2/3 of my salary...which would make this mortgage much tighter...achievable, but tighter. Does anyone else do scenarios like this?


Okay, you sound alot like me. Before we would even view a house, I would make a budget for each individual place, some amounts are fixed and stayed the same, but others changed such as mortgage, property taxes, condo fees, utilities etc....

I am super cautious, my fiance..well he calls me cheap, but I always play the "what if" scenarios! What if I lose my job, how much EI would I get, how long would that last, if we needed to dip into savings how long would that last. What if one of us gets sick, etc...

I am SUPER nervous too. We take possession of our place on August 31/07, and I keep saying this is going to be 21.4 years of hell!
I figure it will take about 6 months to get adjusted to living in our new lifestyle. We plan on paying off our mortgage in 15 years. I figure we could do this by not going on vacations every year, and each year we get raises/bonuses etc this will all go towards the principal of the mortgage.

The most important thing to us now is paying it off ASAP! We will both be gladly taking all the overtime we can.

You sound like you should be more than fine. My best friend laughed at my budgets. Well she got laid off, and they can only to afford to pay their rent! So guess who is now preparing a budget for them!

[pipolchap]

I know there are plenty of calculators out there, but what's your rule of thumb?

I am what one would call...an overly cautious financial planner...Do any of you plan what-if scenarios (like job loss, or salary cuts? how about drastic salary drops like 50%?).

In any case...how much is too much mortgage?

Without getting too complicated, what we (me and wifey) did was base our mortgage payments on only one income, the least (or lesser) of the two. As long as we were both employed, we kept double payments and put 10% of the mortgage every year. If one of us ever lost our jobs, we'd still be very comfortable. Maybe this might work for you...

[nalababe]

Okay, you sound alot like me. Before we would even view a house, I would make a budget for each individual place, some amounts are fixed and stayed the same, but others changed such as mortgage, property taxes, condo fees, utilities etc....

I am super cautious, my fiance..well he calls me cheap, but I always play the "what if" scenarios! What if I lose my job, how much EI would I get, how long would that last, if we needed to dip into savings how long would that last. What if one of us gets sick, etc...

I am SUPER nervous too. We take possession of our place on August 31/07, and I keep saying this is going to be 21.4 years of hell!
I figure it will take about 6 months to get adjusted to living in our new lifestyle. We plan on paying off our mortgage in 15 years. I figure we could do this by not going on vacations every year, and each year we get raises/bonuses etc this will all go towards the principal of the mortgage.

The most important thing to us now is paying it off ASAP! We will both be gladly taking all the overtime we can.

You sound like you should be more than fine. My best friend laughed at my budgets. Well she got laid off, and they can only to afford to pay their rent! So guess who is now preparing a budget for them!


The squeezing every penny into the house is fine, but most of our older friends, parents have regretted this totally. They waited 15-20 before they went on vacations and spent of the non-essentials. Throw in kids (planned or not)...and soon you are 40+ and not experienced life. The Caribbean at 25 is much different than at 40. Same for Europe or Australia. I am not saying don't try and pay off as soon as possible, but don't do it at the expense of experiencing life.

Oh and don't work till you drop...overtime money is great. But the reason you are getting married is to spend time together...don't forget that. Money is not everything.

[89fan]

The squeezing every penny into the house is fine, but most of our older friends, parents have regretted this totally. They waited 15-20 before they went on vacations and spent of the non-essentials. Throw in kids (planned or not)...and soon you are 40+ and not experienced life. The Caribbean at 25 is much different than at 40. Same for Europe or Australia. I am not saying don't try and pay off as soon as possible, but don't do it at the expense of experiencing life.

Oh and don't work till you drop...overtime money is great. But the reason you are getting married is to spend time together...don't forget that. Money is not everything.

I totally agree with you. But we were going on 2 vacations a year spending about 8-10k, so now we only go on 1 per year and book a last minute deal and spend less than 2k.

Overtime only applies to me during the tax season it is mandatory but this past season I could have easily worked an extra 100-200 hours, so I don't think 2 extra months of overtime will kill me!;)

[Whiplash7828]

Thanks to everyone for an interesting discussion.

For the record we have a child
<---------------
and want another one...I didn't state in any post that we didn't want kids. ;)

I consider myself a budgeting master (put myself through 3 years of college on a $4,800/yr student loan with rent, food and school to pay). I know responsibilities have changed (family) but I also know I'll get it done no matter what. I wouldn't mind living in our home for an extended period and wouldn't mind turning it over for a nice profit either. Time will tell.

Don't get me wrong, I feel VERY comfortable with the mortgage we will get, but there are financial scenarios that make me weary (50% salary cut). Could it still get done? probably...but it would be tighter. My original question was mainly asking whether I am over-doing it by planning these scenarios? For example, I hadn't really considered that salaries WILL increase over time...

Do you guys think a HELOC would address some or my concerns? or should I stick to a mortgage and add extra payments as much as possible?

[frogger]

My rule of thumb was be able to afford double payments every payment without having to penny pinch. I've either doubled up or invested in other ways >= to my mortgage payments each month for 5 years so far.

Salaries increasing is a good point, it has definitely made my financial goals easier to achieve.

[Hellfire]

Its sad when I see Zero Down, 40 year mortgages and that's the only way the people qualify for the mortgage. Its even sadder when they are over 50.

[Bullseye]

I tend to make sure I would be ok even with 2/3 of my salary...which would make this mortgage much tighter...achievable, but tighter. Does anyone else do scenarios like this?

Really, I think it depends on people job situations more than anything. If you are in an industry or job where there is a decent chance of being laid off, and not being sure of finding work easily, then I think being overly cautious is just prudent.

If you're like my family, where we both have high demand jobs with no sign of dangers in future, regardless of economic climate, and also the option to return to full time if ever required, then I don't think as much caution is required.

I know you already have a child, but I see many times friends and family start their careers, then buy a house that matches that dual income. Baby comes along, and suddenly they realize that they've moved up to a lifestyle they can not afford while also raising children properly. Obviously, they were not cautious enough in their planning.

[Bullseye]

When I sell I am expecting to make approx. $90,000 on my house (over the 7 years). I'm now turning that around and buying a new home that is worth more than twice what my original home was...for only a slightly bigger mortgage.


Off topic, but I'm curious, as I live in Burlington as well...what part of the city are you living in where you've only made a $90k gain in 7 years? Seems low for the city. It must have been an older townhouse or started condo, maybe?

[bspahn]

Some of these figures seem to be quite on the safe side it seems to me.

My gf and I have combined income of lets say 90k and I believe we wouldn't have a problem purchasing a home for 400k, renovating for 50k which includes putting a suite downstairs which would earn ~ $700-750 a month to help with mortgage payments.

All said and done house costs (mortgage, prop taxes, home insurance etc etc) would likely be ~ 2500/mo but we'd have the rental income to bring it down a bit.

since our take home would be ~ 5000 a month this paints a very healthy picture in my mind. we have no payments on anything else whatsoever (we own our BMW etc)

[Neil]

The most common rule of thumb is the '3x income' one. Obviously various factors would serve to tweak that upward or downward, but you probably wouldn't want to go too far off that without at least knowing why and having a plan.

[bspahn]

okay so our ratio would be closer to 4-4.5 but we'd use a 35y mortgage, then renegotiate once our income goes up, and it will be going up guaranteed.

personally i'd be very comfortable having 5k take home as a couple and forking over the ~ 1800 a month for house costs (ie 2500 minus 700 rent)

leaves us with 3k which is way more than we'd ever spend.

[Bullseye]

okay so our ratio would be closer to 4-4.5 but we'd use a 35y mortgage, then renegotiate once our income goes up, and it will be going up guaranteed.

personally i'd be very comfortable having 5k take home as a couple and forking over the ~ 1800 a month for house costs (ie 2500 minus 700 rent)

leaves us with 3k which is way more than we'd ever spend.

Assuming you meant a $450k mortgage, even over 35 years, that is still $2400/month. You'd have trouble getting a conventional mortgage, I'm guessing, as lenders generally want to see mortgage, taxes, and heating/electric as less than 32% of gross pay ($7500/mo if $90k/year). Taxes would be at least $300/mo (unless you're in Toronto proper), and utilities at least $200 (likely much more with a tenant).

In my experience, lenders don't consider basement rental income. At least, they didn't for us when we bought a house with a basement suite already built and rented it out.

[Freak]

Off topic, but I'm curious, as I live in Burlington as well...what part of the city are you living in where you've only made a $90k gain in 7 years? Seems low for the city. It must have been an older townhouse or started condo, maybe?
Only? I live in the Bayview Townhomes by the RBG. It's right on the Hamilton/Burlington line so to speak. I bought for 172,000...after upgrades (house originally was 149,900) it was brand new townhouse condo. I fear now that I am not going to re-coup the almost $20,000 in upgrades or my profit line on the sale would be a lot better. On average the homes in my area are selling for approximately $260,000 although someone just recently listed for $330,000 for their semi-detached house.

Freak

[Bullseye]

Only? I live in the Bayview Townhomes by the RBG. It's right on the Hamilton/Burlington line so to speak. I bought for 172,000...after upgrades (house originally was 149,900) it was brand new townhouse condo. I fear now that I am not going to re-coup the almost $20,000 in upgrades or my profit line on the sale would be a lot better. On average the homes in my area are selling for approximately $260,000 although someone just recently listed for $330,000 for their semi-detached house.

Freak

So that's a 50% gain in seven years, about 7% per year, during one of the hottest markets in history. I've noticed that the far west of Burlington seems to grow slower, price-wise, than other parts, I'm wondering if it's the proximity to Hamilton?

My home in the Orchard is worth 25% more than I paid for it 2.5 years ago, and a property I looked at downtown (Caroline st) three years ago is now listed again at 50% more than it was then.

[Whiplash7828]

Bullseye...you brought up a good point when you touched on job security. You see I will never lose my job through firing or lay-off....but the company is not very profitable meaning it could close someday. That being said,

Would we downsize to the extreme before closing? yes.
Would I be among the downsized? no.
Would I know the situation long in advance? yes.
Is my position in demand? It is a rare skill...and plenty of related employers in my area (high-tech being the sector). I just can't gauge the demand very well as I have been employed for over 10 years with the same company....so I just don't know...never tested the market...HENCE my slight insecurity.


In any case, I asked in a previous post...would a HELOC (ManulifeOne or any other) be well suited to my situation? Or are their more advantages to a mortgage that I don't see?

[Bullseye]

Bullseye...you brought up a good point when you touched on job security. You see I will never lose my job through firing or lay-off....but the company is not very profitable meaning it could close someday. That being said,

Would we downsize to the extreme before closing? yes.
Would I be among the downsized? no.
Would I know the situation long in advance? yes.
Is my position in demand? It is a rare skill...and plenty of related employers in my area (high-tech being the sector). I just can't gauge the demand very well as I have been employed for over 10 years with the same company....so I just don't know...never tested the market...HENCE my slight insecurity.


In any case, I asked in a previous post...would a HELOC (ManulifeOne or any other) be well suited to my situation? Or are their more advantages to a mortgage that I don't see?

A HELOC is always a good idea, in my opinion, it's cheap to set up, and costs nothing ongoing if you don't use it. In the event of job loss, you could likely tap it for quite a while before hitting the wall, so to speak. Certainly, it would give you enough time that if your situation became dire in a more long term sense (ie. couldn't find a job for 6 months), it would allow you time to sell and move down.

For more short term, non-catastrophic situations, like temporary job loss, most mortgages have skip a payment options that can be exercised 1-2 times a year. Probably enough to give breathing room for such events.

[sleepyguy]

We are considering doing the same ourselves.

We earn around 140K together and have a 300K mortgage on a (estimate) a $425K house. Our rate is great at 4.4% on 5yr fixed. Still... we're thinking of selling the place (I may test FSBO this year) for around $415-20K and getting a place a bit further west (burlington) for around $275-300K. Our morgage would be much more managable at $100K less (or more), rates would be a tad higher but we would be able to do max (+20%) payments with the extra cash. Hopefully own that smaller place in at a rapid pace.

I could then dip into more investing options and also I've wanted to do and pursue some small business ideas I've been toying with for the past while.

This also has a plan-B where if one of use loses our job or is just plain sick of work, we can take some time off and not be in a money crunch.

Just my 2 cents -sg

[Bullseye]

We are considering doing the same ourselves.

We earn around 140K together and have a 300K mortgage on a (estimate) a $425K house. Our rate is great at 4.4% on 5yr fixed. Still... we're thinking of selling the place (I may test FSBO this year) for around $415-20K and getting a place a bit further west (burlington) for around $275-300K. Our morgage would be much more managable at $100K less (or more), rates would be a tad higher but we would be able to do max (+20%) payments with the extra cash. Hopefully own that smaller place in at a rapid pace.


Do you find Burlington any cheaper for comparable properties? I live right beside Bronte park on the Burlington side, and the same house on the Oakville side of the same park seems about the same price to me.

Not sure if you've looked, but $275-300k in Burlington will get you a newer townhouse, or a small post-war bungalow. There are no newer detached under $300k here any more.

[sleepyguy]

Burlington is a tad cheaper. We're at the recently developed Lakeshore Woods area in Bronte.

Yeah, since there is only 2 of use we would be fine with a newish townhome. Even an old bunglow would do (good roof + windows). Our previous home was over 90yrs old, but that was east end Toronto.

Heck we may even just suck it up and downgrade to a Condo... a newer one of course. Most likely an older semi/bungalow or a newish townhome though.

Do you find Burlington any cheaper for comparable properties? I live right beside Bronte park on the Burlington side, and the same house on the Oakville side of the same park seems about the same price to me.

Not sure if you've looked, but $275-300k in Burlington will get you a newer townhouse, or a small post-war bungalow. There are no newer detached under $300k here any more.

[Bullseye]

Burlington is a tad cheaper. We're at the recently developed Lakeshore Woods area in Bronte.

Yeah, since there is only 2 of use we would be fine with a newish townhome. Even an old bunglow would do (good roof + windows). Our previous home was over 90yrs old, but that was east end Toronto.

Heck we may even just suck it up and downgrade to a Condo... a newer one of course. Most likely an older semi/bungalow or a newish townhome though.

I'm familiar with Lakeshore Woods, but didn't realize there was anything in there under $500k. You're practically in Burlington already, then.

You mention that your rates would be higher, is that because your term is ending? If not, you should be able to port your existing rate. May get dinged with a penalty for breaking the portion that you reduce it by, though, if it's above your annual pre-payment priveledge amount.

[sleepyguy]

Yeah, Burlington is just 2 streets over.

We're in the smallerish homes (2000 sq/ft). Our neighbour just moved in and they paid $436K (3mths ago) and 2 doors down paid $420K (7mths ago) ~similar models. So yeah, the smaller ones are under $500K. Our exact model (+10K upgrades maybe if that) is selling for $465K 1 block from us. He's must be smoking something.

Yeah, we'll have to negotiate with the bank. But first I have to do some major research on FSBO.

There is a detailed post here and i'll have to take a 2nd look at it. Thks -sg

I'm familiar with Lakeshore Woods, but didn't realize there was anything in there under $500k. You're practically in Burlington already, then.

You mention that your rates would be higher, is that because your term is ending? If not, you should be able to port your existing rate. May get dinged with a penalty for breaking the portion that you reduce it by, though, if it's above your annual pre-payment priveledge amount.

[Whiplash7828]

I see the Heloc's advantage as being that I could (in the event of a long term job loss) pile some bills on the loc and pay the minimum payment until I find a job. Also, does it not allow to pay off the mortgage faster as it is not compound interest?

Here's what I typically do (while employed where I am right now):
- 1K savings per month (set aside in another account) to create a cushion.

If I were to always drop that 1k on the LOC....and pick it up when needed, wouldn't that very quickly pay off the house???

[NuclearBlast]

Yeah, Burlington is just 2 streets over.

We're in the smallerish homes (2000 sq/ft). Our neighbour just moved in and they paid $436K (3mths ago) and 2 doors down paid $420K (7mths ago) ~similar models. So yeah, the smaller ones are under $500K. Our exact model (+10K upgrades maybe if that) is selling for $465K 1 block from us. He's must be smoking something.

Yeah, we'll have to negotiate with the bank. But first I have to do some major research on FSBO.

There is a detailed post here and i'll have to take a 2nd look at it. Thks -sg

Sorry for the off-topic, but are there any decent freehold townhouses in Oakville under $300,000? Let's say around $275-$280K? I did serach the MLS but I cannot tell from the photos there and I don't want to waste the time of some real estate agent since I'm far from being ready to buy, just gathering info for now. Also, are there any areas in Oakville that are not "good"? I know we have many here in Toronto where you don't want to buy a home to live in.

[Bullseye]

I see the Heloc's advantage as being that I could (in the event of a long term job loss) pile some bills on the loc and pay the minimum payment until I find a job. Also, does it not allow to pay off the mortgage faster as it is not compound interest?

Here's what I typically do (while employed where I am right now):
- 1K savings per month (set aside in another account) to create a cushion.

If I were to always drop that 1k on the LOC....and pick it up when needed, wouldn't that very quickly pay off the house???

I think you're confusing a HELOC with one of the hybrid mortgage products like Manulife One. A HELOC is simply a line of credit that is secured by your house, getting you a better rate than an unsecured LOC.

[Whiplash7828]

I think you're confusing a HELOC with one of the hybrid mortgage products like Manulife One. A HELOC is simply a line of credit that is secured by your house, getting you a better rate than an unsecured LOC.

OK you're right...I'm definitely talking about a product like Manulife One...anybody know anything about these?

[Bullseye]

Sorry for the off-topic, but are there any decent freehold townhouses in Oakville under $300,000? Let's say around $275-$280K? I did serach the MLS but I cannot tell from the photos there and I don't want to waste the time of some real estate agent since I'm far from being ready to buy, just gathering info for now. Also, are there any areas in Oakville that are not "good"? I know we have many here in Toronto where you don't want to buy a home to live in.

Lots of newer ones in Burlington near me for $270-280k, so I imagine there are some in north Oakville around the same range.

There are no areas in Oakville that I would consider not good, with possibly the exception of small parts of the Kerr st area, where there are lots of rental units. There are also many units on Trafalgar north of the QEW, but these are rented mostly to students, so no real concerns other than maybe noise and mess.

[Bullseye]

OK you're right...I'm definitely talking about a product like Manulife One...anybody know anything about these?

There is a lengthy thread started my a user named mork that discusss all of the pros and cons of it, have a search for it, some good reading.

[Whiplash7828]

thanks

[NuclearBlast]

Thanks, Bullseye:) One more question - is there any way to find out what were the price increases/decreases for a certain property or area, without having an agent do a market analysis for me? I mean, like some registry of sorts where for a fee you can see what was the price of the property let's say for the last 5 years?

[Bullseye]

Thanks, Bullseye:) One more question - is there any way to find out what were the price increases/decreases for a certain property or area, without having an agent do a market analysis for me? I mean, like some registry of sorts where for a fee you can see what was the price of the property let's say for the last 5 years?

I think only agents would have that info.

[Freak]

So that's a 50% gain in seven years, about 7% per year, during one of the hottest markets in history. I've noticed that the far west of Burlington seems to grow slower, price-wise, than other parts, I'm wondering if it's the proximity to Hamilton?

My home in the Orchard is worth 25% more than I paid for it 2.5 years ago, and a property I looked at downtown (Caroline st) three years ago is now listed again at 50% more than it was then.

I hear you. I'm just not complaining. I am very happy with the return, and considering that in the 7 years I have almost completely paid off my mortgage and my salary has almost doubled...I am very happy.

I guess it depends what you buy as well...our area is VERY desirable for new buyers and empty nesters, but I can only imagine if we had purchased a sinlge family detached home 7 years ago...I would be looking at profits of closer to $150,000. But again...I'm not complaining, especially after hearing the horror stories from my parents in the early 80's when interest rates were 16%...people lost their homes.