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  #61  
Old 01-13-2018, 04:49 PM
HyperMOA HyperMOA is online now
 
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Originally Posted by leeelmer View Post
Yes yes. But its not 1972 now its 2018
And houses cost 100s of thousands of dollars
Do you really think the average house in lets say Red Deer today is on the market for $372000.00 is going to be worth millions is 20 years?
No it certainly is not. Those days are gone. We are talking about buying a house now not years ago. Big difference
You are comparing 46 years not 20. Yes I do believe that a $372,000 house in Red Deer will be worth a million dollars in 2064. Barring nuclear war, or worse 45 years of NDP I believe it will.

When people built in the 70's for $20,000, people were shaking their heads at the poor decisions made by their children. A house in 1949 was only $3100. (random number)
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  #62  
Old 01-13-2018, 04:50 PM
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Originally Posted by DiabeticKripple View Post
I’m going with the RRSP route for first time home buyers and using money that I have in company stocks and my TFSA.
Convert those stocks and TFSA into RRSP's first. Cash in on the tax refund now.
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  #63  
Old 01-13-2018, 04:55 PM
223MB 223MB is offline
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Originally Posted by HyperMOA View Post
Convert those stocks and TFSA into RRSP's first. Cash in on the tax refund now.
Lets say I buy $20,000 worth of RRSP, what kind of refund am I looking at on average.? I currently have my money in a Tfsa and stocks. My plan was to just cash those out and put the cash for the down payment.
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  #64  
Old 01-13-2018, 05:25 PM
Scott h Scott h is offline
 
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Originally Posted by Arty View Post
Hardly. The best way to 'gain equity' is to save your money and invest it so that YOU are getting paid interest, instead of paying out blood money on interest and overpriced accomodation at peak prices. Housing which will need a bulldozer by the time it's paid off (if ever).

Then you are stuck paying hundreds of thousands of dollars interest to the bank on top of massively overpriced RE, spiked by artificially low interest rates. Don't you read the financial press at all?

Cheap interest and inflated money chases up capital prices, leaving you holding the bag when interest rates swing back up again to normal. Same as bond prices.
I see what you are eluding to but you forgot to add in the money that you would be paying to have a place to live. Buying may not always be the smartest move, but you do have to add in all the numbers.
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  #65  
Old 01-13-2018, 05:32 PM
ryeguy21 ryeguy21 is offline
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Originally Posted by 223MB View Post
Lets say I buy $20,000 worth of RRSP, what kind of refund am I looking at on average.? I currently have my money in a Tfsa and stocks. My plan was to just cash those out and put the cash for the down payment.

depends on your tax bracket but a safe estimate is a 30% refund.
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  #66  
Old 01-13-2018, 05:45 PM
srs123 srs123 is offline
 
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Buy a home that you can pay off the mortgage off on one income. It is less stressful if you or ur partner lose their job.
Figure out if the place will serve you for at least 5 years. Statistics show that 66% of first time home owners move within the first 3 years. And lose a bit of money on realtor fees.

Buy in an established neighborhood new or old doesn't matter.

Get a home inspection done

When you put out ur offer, put a stipulation there that 5000 will be held back from the purchase price until 3 days after moving in case the previous owners change something or scratch something. I just had this work for me a few months ago when we bought our place. The previous owners hired a moving company and the scratched the hardwood floors while dragging a dinning table to the door. So we clawed back 3000 to fix it.

Shop for rates, higher a mortgage broker if u are too busy.

Ask for second and third showings if u want and write everything down and take photos for comparison once u receive home, it will make it easier to remember which house had what
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  #67  
Old 01-13-2018, 05:58 PM
223MB 223MB is offline
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Originally Posted by srs123 View Post
Buy a home that you can pay off the mortgage off on one income. It is less stressful if you or ur partner lose their job.
Figure out if the place will serve you for at least 5 years. Statistics show that 66% of first time home owners move within the first 3 years. And lose a bit of money on realtor fees.

Buy in an established neighborhood new or old doesn't matter.

Get a home inspection done

When you put out ur offer, put a stipulation there that 5000 will be held back from the purchase price until 3 days after moving in case the previous owners change something or scratch something. I just had this work for me a few months ago when we bought our place. The previous owners hired a moving company and the scratched the hardwood floors while dragging a dinning table to the door. So we clawed back 3000 to fix it.

Shop for rates, higher a mortgage broker if u are too busy.

Ask for second and third showings if u want and write everything down and take photos for comparison once u receive home, it will make it easier to remember which house had what
Our plan was to buy one home and stay there. Everyone tells us to buy something small and cheap, then upgrade in 5 years. Why not just do it once and get it over with.
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  #68  
Old 01-13-2018, 06:08 PM
srs123 srs123 is offline
 
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Originally Posted by 223MB View Post
Our plan was to buy one home and stay there. Everyone tells us to buy something small and cheap, then upgrade in 5 years. Why not just do it once and get it over with.
I agree with you, if u can do it now and wont break the bank , then save ur self the hastle and the realtor fees in 5 years when you sell the place to upgrade.
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  #69  
Old 01-13-2018, 07:31 PM
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Originally Posted by 223MB View Post
Lets say I buy $20,000 worth of RRSP, what kind of refund am I looking at on average.? I currently have my money in a Tfsa and stocks. My plan was to just cash those out and put the cash for the down payment.
As Ryeguy pointed out 30% is a safe figure. Depending on your income it can be higher too. Just throwing out realistic numbers, on $20,000 you would receive $6-8000 back from your taxes. Which will buy furniture, appliances, upgrades or repairs. Better yet, get that TFSA working for you again, and compounding for the next 40 years.
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  #70  
Old 01-13-2018, 07:35 PM
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If you're not interested in buying again in a few years go look at lots of homes and show-homes and make sure you know what you want. Also buy a bit bigger than you think you need. IT may be just you and the wife now; even if its not on the radar, it could be you, the wife, 2 kids, a dog , and your mother-in-law in 5 years from now.

As Garth Brooks says, "Ask me how I know."
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  #71  
Old 01-13-2018, 08:50 PM
JWCalgary JWCalgary is offline
 
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Mortgage broker. Bi weekly. Variable.

Sent from my SM-G530W using Tapatalk
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  #72  
Old 01-13-2018, 09:34 PM
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Wouldn’t a weekly payment help pay down the mortgage faster as the interest compounds on a lesser amount?
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  #73  
Old 01-13-2018, 11:46 PM
223MB 223MB is offline
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thabks again everyone for the valuable information.
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  #74  
Old 01-15-2018, 01:14 PM
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Originally Posted by Ken07AOVette View Post
There are other giant costs too.
If you have a high maintenance wife you might pay for a complete reno every few years.
I will pay roughly $50,000 in insurance in 20 years. It is a good thing that homes keep their value, or that would be a truly ugly number.
I have only ever had 1 claim, a few years ago when the town was backflushing the sewer. While my backwater valve stopped everyone else's burritos from coming into the basement, when my daughter drained the bathtub a bunch of ours were on the basement carpet.
That cost them just under $40,000.00. I was truly glad to have paid that year.
Forgot to mention taxes. In 20 years i will have paid nearly $100,000 in property tax on my home. In a town of 180 people. With no store, gas station police or hospital...
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  #75  
Old 01-15-2018, 02:11 PM
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Take into account all the expenses

Lawyer $1200
Inspection $300-$400
Property tax $2000-$3000/yr on average
House insurance $1000-1500/yr

A good idea is to make a realistic budget of all your expenses on a monthly bases compared to your income. Make sure there is some room in there to continue to invest in RRSP/TFSA. Furniture is also a big expense, couches, bed set, kitchen table etc can an really add up quick.

Don't be scared to lowball the asking price. The worst that can happen is they so no.

Good luck!
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  #76  
Old 01-15-2018, 09:56 PM
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Quote:
Originally Posted by DiabeticKripple View Post
Wouldn’t a weekly payment help pay down the mortgage faster as the interest compounds on a lesser amount?
It does help you pay faster, but that's mostly because more payments are made in a given time period. A very tiny amount is saved in your having made a payment 1 week earlier (weekly vs biweekly), or 3 weeks early.
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  #77  
Old 01-16-2018, 06:41 AM
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Budget for significantly higher mortgage rates looking out in the future. It's very possible we may never see rates as low as we have had in the recent past. That would be my biggest worry about carrying a mortgage right now. Work hard at paying it of asap and don't overspend.
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  #78  
Old 01-19-2018, 10:02 PM
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We bought last spring in Calgary. Signed on for a 20 year variable rate. Rates rose 3 times in the last year (or was it 4... with the recent hike last week...) so we locked in before this last rate hike. 5 year fixed rate for 3.19%. Bi-weekly accelerated payments. A couple months of the year will have 3 payments.

If you're not extremely handy, buy something that is move-in ready.
If you're quite handy and have experience in framing, drywalling, plumbing, electrical etc, then buying a bit of a fixer-upper is a good alternative.

Get as much money put together as you can WHILE STILL having a nice cushion left over for regular living expenses and normal life expenses. We put 12% down on our house. IF we would've put 20% down, we would've saved $10,000 on CMHC fees sure, but we may not have even been able to afford KD and O'douls. lol

Good luck.
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  #79  
Old 01-20-2018, 07:46 AM
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Digger1 Digger1 is offline
 
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Having owned 5 other houses, we're now finally on a mini farm with a highly efficient cozy little house, I'd say read Dave Ramsey's books. He will permanently warp your mind about living within our means and paying off stuff quickly. Stay reasonable, keep a margin. Best wishes!
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  #80  
Old 01-20-2018, 10:53 AM
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Big Sky Big Sky is offline
 
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Nephew moved to Calgary in the fall and they were looking for a new house. They asked us to help look at the houses. There's a lot to consider when house shopping so extra 'eyes' can be a big help. Here's a few thoughts from their process.

DIY work may or not be an issue. No permits for electrical work is not a good sign. Some places had DIY work that I wouldn't give a nickle for.

Also saw some real nice DIY work. One place where they did a DIY kitchen reno. The owner did some work and they brought in trades for some. The owner had a binder showing all of the steps of the reno so that people could see the work that was done. I really liked this. Being able to see what's behind the fancy backsplash is reassuring.

For sure, check out the neighborhood. Being able to see the comings and goings of the neighbors is good. They rejected one place because of the neighbors, two doors down.

Local police may have a crime map. Check it out.
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  #81  
Old 02-10-2018, 11:27 AM
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Well I cashed in my company stocks.

I went to the bank to deposit the cheque, and while I was there I figured I’d see what I can get pre approved for. I was preapproved for the amount I wanted (400k purchase, 80k down for a 320k mortgage) at 3.49% 5 year fixed, closed. I’m still unsure of what kind of mortgage I want, but I’ll be purchasing after this pre approval expires so the mortgage type isn’t set in stone.

Now I’m going to take that cheque since it was all pre-tax income and split it between me and my GF’s RRSP’s so that the gubbermint cant get their paws on it and then we will use that as half of the down payment.
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  #82  
Old 02-10-2018, 12:03 PM
Sporty Sporty is offline
 
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Keep in mind when using RRSP's as a down payment for first time home buying, you have a certain amount of years to pay that back or they'll want to tax you on it
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  #83  
Old 02-10-2018, 04:43 PM
Glion Glion is offline
 
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Include a cover letter in your offer. Not a sob story but just a letter telling who you are etc. People are more willing to negotiate if you do.(generally)
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  #84  
Old 02-10-2018, 06:44 PM
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Originally Posted by 58thecat View Post
Completely depends on your financial situation...if you got a few bucks buy a fixer upper or a rental place in which you can life in and rent out a space helping cut over all costs and the fixer upper is a no brainer, location, potential to turn over with a little elbow grease and then sell, move into another type property and repeat. I guarantee well under 20 years you will be mortgage free in a house that you completely enjoy and then put that would have been mortgage payment away into a plan for retirement, emergency funds and ihhhh yeah trips and a few toys....not hard to do. Break it down into 5 year plans, stay the course and you would be surprised how time fly's by and you own everything and then some....
X2 ,this is solid advice, look for something you can make noticeable changes,that will enhance its worth, property size also important, sometimes people buy because it's a nice yard.
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  #85  
Old 02-10-2018, 06:52 PM
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Quote:
Originally Posted by Sporty View Post
Keep in mind when using RRSP's as a down payment for first time home buying, you have a certain amount of years to pay that back or they'll want to tax you on it
15 years I think is the time frame?
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  #86  
Old 02-10-2018, 08:22 PM
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Dont unless you like Home Depot and spending all your money on a house.
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  #87  
Old 02-10-2018, 10:39 PM
jstubbs jstubbs is online now
 
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I would say that if you have any chance that you might move within ~3 years or purchasing, don't bother buying and rent.

Lets say you buy a house for $450k, put $100k down (smart too, as you don't pay mortgage insurance with your conventional, non-high ratio mortgage), so you have a $350k mortgage and do some math.

On a $350k, 3.5% APR, 25 year amort, 5 year term mortgage, in 36 months you'll have paid $35k in pure interest and only $27k of your principle paid off. Everyone loves to say renting is throwing money out the window, but on that mortgage you just paid $62k to acquire $27k in equity. Then when you go to sell, you pay 7% on the first $100,000 of the sale, and 3% on the remaining for realtor fees only. Lets say the market has been realistic and your house three years later sells for $500k.

You still owe roughly $323,000 on the mortgage, so you receive $137,000 in proceeds from the sale before any other fees. Realtor fees are typically 7% on first $100k and 3% on the rest, so that equates to $16,000 out of your pocket. Then legal, moving, etc expenses add up to easily another $2500 out of that. Then factor in the $35,000 you paid in interest, and your $100,000 downpayment.

$137,000
-$100,000
-$35,000
-$16,000
-$2500
Final total: -$16,500 loss. This doesn't even include the other costs associated with purchasing the house in the first place. Nor does it entail the opportunity cost of investing that $100,000 downpayment for three years and the capital gains associated with that make the buy vs rent decision even more of a no-brainer. Or had there not been a 20% downpayment, mortgage insurance on a $350,000 mortgage would have been roughly another $13,000 or so.

Owning isn't the end-all choice. Renting provides mobility and more freedom. Long term, owning a house is certainly a better option, but don't tie yourself down with one. It'll be nothing but a headache and a financial burden.
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