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Winter 2017


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3 hours ago, ArcticCrusher said:

I am sure there are lots in that boat.:dunno:  Although, with borrowing rates this cheap, it can be carried.  I don't see rates moving higher any time soon.

With the minimum down payment being 5% theoretically his purchase price may have been about $840K or more. A mortgage at 2.5% on $800K amortized over 25 years with bi-weekly payments is $1655.76. Roughly $3311.52 per month.... damn scary. Now for the real scary part apparently for many. If the rates go up to 3.5% those bi-weekly payments jump to $1847.55. An increase of $191.79 every two weeks or approximately $383.58 per month more. How many with mortgage payments that high have an extra $400 a month laying around. Add to the equation that unless they have a 20% down payment they need to pay mortgage insurance. In this case about $31K added to the amortization.

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More than 700,000 Canadian borrowers could be facing payment shock on their debt obligations if interest rates rise by a quarter point, and that rises to as many as one million people should rates go up by 1 per cent, says a study by credit monitoring firm TransUnion.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/canadian-borrowers-could-face-payment-shock-if-interest-rates-rise/article31838268/

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31 minutes ago, 02sled said:

With the minimum down payment being 5% theoretically his purchase price may have been about $840K or more. A mortgage at 2.5% on $800K amortized over 25 years with bi-weekly payments is $1655.76. Roughly $3311.52 per month.... damn scary. Now for the real scary part apparently for many. If the rates go up to 3.5% those bi-weekly payments jump to $1847.55. An increase of $191.79 every two weeks or approximately $383.58 per month more. How many with mortgage payments that high have an extra $400 a month laying around. Add to the equation that unless they have a 20% down payment they need to pay mortgage insurance. In this case about $31K added to the amortization.

Capture1.thumb.JPG.e9a47e33b3aaaff9451f20cdd56ed363.JPG

More than 700,000 Canadian borrowers could be facing payment shock on their debt obligations if interest rates rise by a quarter point, and that rises to as many as one million people should rates go up by 1 per cent, says a study by credit monitoring firm TransUnion.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/canadian-borrowers-could-face-payment-shock-if-interest-rates-rise/article31838268/

He should use a rate of 5% to see if he could carry it.  Lots of dumb people out there, I do my best to try and not follow them.

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10 minutes ago, ArcticCrusher said:

He should use a rate of 5% to see if he could carry it.  Lots of dumb people out there, I do my best to try and not follow them.

I agree... too many live pay cheque to pay cheque without any backup money in the bank or investments to draw on.

A standard rule for lenders is that your monthly housing payment (principal, interest, taxes and insurance) should not take up more than 28 percent of your income before taxes.

Using that $800K mortgage with payments of $1655.76 bi-weekly that's $43.049.76 a year. If that's 28% of the annual income. They would need a combined income of $155K per year.

The average Ontario combined family income in 2014 was $78,790. About 1/2 of what is the minimum requirement to carry that $800K mortgage. Sure makes me glad I haven't had a mortgage in a very long time.

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14 minutes ago, 02sled said:

I agree... too many live pay cheque to pay cheque without any backup money in the bank or investments to draw on.

A standard rule for lenders is that your monthly housing payment (principal, interest, taxes and insurance) should not take up more than 28 percent of your income before taxes.

Using that $800K mortgage with payments of $1655.76 bi-weekly that's $43.049.76 a year. If that's 28% of the annual income. They would need a combined income of $155K per year.

The average Ontario combined family income in 2014 was $78,790. About 1/2 of what is the minimum requirement to carry that $800K mortgage. Sure makes me glad I haven't had a mortgage in a very long time.

They families making 78K are not going to be able to afford that so cupcake needs a reality check.  But say two teachers with combined income of 200K can.

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3 hours ago, ArcticCrusher said:

They families making 78K are not going to be able to afford that so cupcake needs a reality check.  But say two teachers with combined income of 200K can.

My thought too. Need to be teachers, firemen or cops to afford those payments.....lol

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On 4/7/2017 at 1:50 PM, 02sled said:

I agree... too many live pay cheque to pay cheque without any backup money in the bank or investments to draw on.

A standard rule for lenders is that your monthly housing payment (principal, interest, taxes and insurance) should not take up more than 28 percent of your income before taxes.

Using that $800K mortgage with payments of $1655.76 bi-weekly that's $43.049.76 a year. If that's 28% of the annual income. They would need a combined income of $155K per year.

The average Ontario combined family income in 2014 was $78,790. About 1/2 of what is the minimum requirement to carry that $800K mortgage. Sure makes me glad I haven't had a mortgage in a very long time.

I couldnt sleep at night with an $800K mortgage.   

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The big problem is when people blow their brains out buying a house only to find out that the house doesnt appraise for anywhere close to what they offered and they suddenly need to come up with a bunch of cash to make the numbers work.   This is happening pretty regularly in my area. 

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7 hours ago, 02sled said:

It could be worse. Japan has multigenerational mortgages where you'll never pay it off. Your kids or perhaps grandkids finally do.

You can't buy a car in japan unless you have a parking spot. 

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