Where and what is the price of the condo I can get by 2009?

[Immortal]

I finished my masters last year and luckily I have no debt. I'm 25 (in a month) making 45K a year. The pay might not be much but I like what I'm doing plus I'm sure it'll go up eventually considering this is my first year.

I currently have 25000 in a one year term deposit earning just a little over 4 % a year and 5000 in a high interest savings account which is at 3 %.

I buy the company's stock with 10% of my salary, so let's say if the stocks doesn't go down or up, I'll have another $ 4500 at the end of the year as well which I can take out any time. I'm also saving around $ 1000 a month considering I am currently living with dad so the expense is minimal.

Now my plan is to get a condo (1 bedroom) in the GTA close to a subway station within walking/bus distance so I don't need a car anymore by the end of next year (2009). By then, I should have 40,000 (but hopefully closer to 50,000) saved.

I have two questions for you experts here.

1) What is the location/price of condo I can get (if current conditions doesn't change) with my budget by the end of 2009? What is the amount of mortgage I can get, length of time of the mortgage, how much down payment is best and how much I should pay back per month.

2) What can I do with my money so that I can get that place earlier or in a better position if nothing else changes for the better by the end of 2009?

Thank you all for reading and all advice given.

[c13]

I am not a condo expert, realtor, mortgage broker or otherwise highly knowledgeable about buying or selling real estate. That being said I choose to reply anyway..

1) What is the location/price of condo I can get (if current conditions doesn't change) with my budget by the end of 2009?

If you want to *move* into a Condo by end of 2009 then it must either be very nearly completed or already built :). What I did was google, read new condo magazines, newspapers and go to realtor's and builders websites (e.g. Tridel, Monarch Group) that had these kind of listings.

As condo projects near completion there will also be buyers who simply want to sell their rights to move in to their unit at a profit (or currently in rare cases a loss) as their contract allows.

If you want to *buy* a pre-construction condo by the end of 2009 then time is on your side. Do the above, and work with a realtor specializing in new condos in the area you want to live in, until you find the best one for you.

What is the amount of mortgage I can get, length of time of the mortgage, how much down payment is best and how much I should pay back per month.

You are asking the classic affordability question.

RBC has a calculator https://www.rbcroyalbank.com/RBC:SMbHQI71JsYAH8AYf5Y/cgi-bin/mortgage/tools/howmuch/afford.pl :

For ease of reading I've copied and pasted their results here after entering in your data, along with some assumptions:

************************************************** ********
What Can I Afford to Buy?

Option 1 Option 2 Option 3 Option 4 Option 5
Maximum Purchase

$135,846 $143,481 $152,562 $175,751 $185,601

Down Payment

$0 $7,174 $15,256 $35,150 $45,000

Down Payment

0% 5% 10% 20% 24.2%

Mortgage Principal Amount

$135,846 $136,307 $137,306 $140,601 $140,601

Default Insurance Premium

$4,755 $4,294 $3,295 $0.00 $0

Total Mortgage
$140,601 $140,601 $140,601 $140,601 $140,601

Payment Amount

$705 $705 $705 $705 $705

[snip]

What Will My House Cost?*
Monthly Payment (Principal and Interest)
$705
Rate 5%
Property Taxes $200
Heating Costs $120
Condo Fees $350
Total Monthly Housing Cost $1,375
************************************************** ********

So by now if you undersood all their output, you must be asking yourself what sort of condo on a subway line you can possibly buy for $185,601 right?

Another question you might have is, if RBC's online calculator is estimating that you could borrow up to $185,601, is it possible that another bank or lender would give you more under the same criteria?

Those would be good questions to ask a realtor and a mortgage broker :)

Your 2nd question is also a great one:

What can I do with my money so that I can get that place earlier or in a better position if nothing else changes for the better by the end of 2009?

Many people wish they had a crystal ball to determine where to park their money for maximum growth. Your term deposit at 4% and the savings at 3% are beating inflation (if you believe the government and economists) by a small margin. But the money is relatively very safe there then anywhere else.

To earn better than that you likely need to be prepared to take a higher risk. The best person to discuss that with is a financial adviser.

I'm in a similar boat to you but much less well off. Pls post here again to tell us how you made out seeking advice on buying a condo.