I'm down for that... You still in downtown? Let's get together soon!
Ask me anything about Real Estate
- Thread starter Addy
- Start date
I'm down for that... You still in downtown? Let's get together soon!
rmemedic
Well-known member
Question!
First time buyer.
House will be a new build. Not part of a new development plot, just a random piece of land that will be purchased with the house.
Ill be doing it all through a realtor with a contractor. My realtor wasn't sure about my question and I didn't want to bother the mortgage guy yet.
If me and the contractor agree on price, do I still need only my 5% down on the mortgage?
This house is the only one I want in my price range.
First time buyer.
House will be a new build. Not part of a new development plot, just a random piece of land that will be purchased with the house.
Ill be doing it all through a realtor with a contractor. My realtor wasn't sure about my question and I didn't want to bother the mortgage guy yet.
If me and the contractor agree on price, do I still need only my 5% down on the mortgage?
This house is the only one I want in my price range.
Couple of things...
Is there a house on the land right now or will you be building it?
Its hard to get a mortgage for a vacant lot hence you won't be able to get its at 5% down
If there is a house, then you can purchase it for 5% down and would still run into issues if you're looking to finance your construction. You would need at least 20% in to get construction financing as it usually uses your property as collateral and takes the future value into consideration.
Now, since I'm not aware of all the details, this might be possible and I suggest you talk with your REALTOR and a qualified mortgage broker to see how this can be worked.
Hope this helps...
Is there a house on the land right now or will you be building it?
Its hard to get a mortgage for a vacant lot hence you won't be able to get its at 5% down
If there is a house, then you can purchase it for 5% down and would still run into issues if you're looking to finance your construction. You would need at least 20% in to get construction financing as it usually uses your property as collateral and takes the future value into consideration.
Now, since I'm not aware of all the details, this might be possible and I suggest you talk with your REALTOR and a qualified mortgage broker to see how this can be worked.
Hope this helps...
EvolutionIV
Active member
Hi Addy,
Thanks for taking your time to answer our questions. I am finding this thread quite informative. I have a fairly simple question. For people that are buying houses (semi/freehold/detached) recently, what is the typical downpayment?
Thanks for taking your time to answer our questions. I am finding this thread quite informative. I have a fairly simple question. For people that are buying houses (semi/freehold/detached) recently, what is the typical downpayment?
rmemedic
Well-known member
Not what I wanted to hear, but I'll see what they give me for answers.
The lot will be vacant before I buy.
What an awesome thread idea.. seems it's been going on for a while too, not sure why I never noticed it before!
I don't sell in the city, so I'm not trying to steal your business Addy
but I can answer a question or two!EvolutionIV,
This varies a lot by price range, and by stage of life.. ie. a first time buyer vs someone who's selling a home and buying another.. obviously someone who is selling a home with equity has a lot more to put down, and they typically (but not always) will put down most if not all of what they got from the sale of the existing home. First time buyers, i'm going to say typical is the minimum which is 5%
If your credit is exceptional you can also get away with zero down.. but that's another story.
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For a Canadian resident, you can purchase with as low as zero down. CMHC insured mortgages require at least 5% down payment plus proof of closing costs.
You need to have a solid credit with a proven record of making payments and a beacon score of better than 600. A full time job also helps
Best is to sit down with your real estate agent and mortgage broker to review what your minimum requirements would be.
Hope this helps!
Sent from my BlackBerry 9800 using Tapatalk
You need to have a solid credit with a proven record of making payments and a beacon score of better than 600. A full time job also helps
Best is to sit down with your real estate agent and mortgage broker to review what your minimum requirements would be.
Hope this helps!
Sent from my BlackBerry 9800 using Tapatalk
What an awesome thread idea.. seems it's been going on for a while too, not sure why I never noticed it before!
I don't sell in the city, so I'm not trying to steal your business Addy
EvolutionIV,
This varies a lot by price range, and by stage of life.. ie. a first time buyer vs someone who's selling a home and buying another.. obviously someone who is selling a home with equity has a lot more to put down, and they typically (but not always) will put down most if not all of what they got from the sale of the existing home. First time buyers, i'm going to say typical is the minimum which is 5%
If your credit is exceptional you can also get away with zero down.. but that's another story.
Welcome!
Prices rise with increase in infrastructure investments and population growth.
Look for areas with increase in density and infrastructure investments taking place such as roads, subways, LRT etc... you will find your answer.
Here's the law that brought about a revolution in development so far in Ontario... Read through it and there are still pockets where you can make money...
https://www.placestogrow.ca/index.php?option=com_content&task=view&id=4&Itemid=9
Hope this helps...
Let me put it this way: If the house I currently own wasn't the perfect place for me (i.e. I see myself living here quite comfortably for the next 20 years) I'd be selling it now. The profit alone would be enough to rent a nice apartment for 2-5 years, not to mention the interest on the remainder.
In other words, I think the prices cannot get much higher before come kind of "correction" happens. Also, interest rates can hardly get lower. Those stuck with big mortgages are going to pay for that "correction" when the interests go higher and resale prices tank. Those with cash in hand are going to buy them off for pennies on the dollar.
For those looking to buy now my layman advice is to be very careful. If it's something you really like, don't plan to sell for at least ten years and can afford a 9% mortgage (historical average) - go for it. If you think of it primarily as a smart investment you'll be terribly disappointed and potentially financially ruined.
^^ I agree with your perspective.
Not to mention, OSFI tightening regulations and taking into account LTV's (Loan to Value) ratio's on renewal, will make things tighter for those that bought houses with 0-5% down and are barely making payments now.
http://www.bloomberg.com/news/2012-...ousing-related-failures-corporate-canada.html
http://www.osfi-bsif.gc.ca/app/DocRepository/1/eng/guidelines/sound/guidelines/b20_dft_e.pdf
It's important to note that this is different in different area's as well..
I don't want to negate that above poster, as I can't really speak to the Toronto market, but I feel completely different about the market here in Barrie. It's true the interest rates will rise, making sure you budget for rates to hit 9% is great advice. But I don't see the 'correction' happening up here. Home prices in Barrie follow a relatively slow and steady climb. It's a very stable market, and isn't in the same (dare I call it a bubble?) that Toronto is in. When interest rates do inevitably rise, we might see prices level off a little bit, but I don't believe there will be a drop. If you're in Barrie, Innisfil, or any of Simcoe County my advice is take advantage of the historically low rates, and lock in for as long as you can. But now is a great time to buy.
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Absolutely. It's never a black and white situation, but we need to generalize to some measure. Prices in Toronto are driven partly by immigration and new capital, which is definitely not the case in Barrie, at least not nearly to the same extent. I was talking mostly about where I live, which is Toronto urban area.
What really counts is the ratio between the average yearly family income and the average price of the average family dwelling in a certain area (I know, a lot of averages). From what I've heard, that ratio has been getting progressively worse for quite some time and will have to eventually cause a crisis if it continues like this.
By the way guys, some of the posts on the first page are now out of date since they are a number of years old. For example, you can now take 25K out of RRSP's as a first time home buyer for a down payment, not just 20K.
By the way, as some of you might know I am currently in Sydney, Australia working. Been here for a month now and I will be here for another month still. Sydney shows up on many "Top 10 Most Expensive Cities to live in" articles. Anyways, compared to here, our real estate prices in Toronto are A JOKE! I'm currently staying in a one bedroom condo downtown (paid for by work). It's very central, right next to city hall but the actual place is nothing special. It's about 700 square feet if I had to guess so a decent size, and has a nice pool, but the view sucks balls (pretty much get a great view of the building next to it), the kitchen is mediocre (no granite counter tops, no oven, crappy fridge, no freezer!), etc. My place back in Toronto is much nicer than this and similar size, though location wise I'm in Etobicoke and not downtown. My condo in Toronto cost me 300K a year ago. My coworker'splace, which is central (front and Spadina), lake ontario view, 800 square feet, etc. cost him about 365K. I looked up units in this building in Sydney and comparable units cost about 700K!!!!!! Not only that but their intrest rates are almost triple what I'm currently paying in Canada! People here probably earn a little more money than in Toronto but not A LOT more and somehow the economy here is surviving. People aren't loosing their homes, life goes on, etc. I used to be one of the people that though that the market in toronto can't take much more and prices simply cannot go up any more or no one will be able to afford a home so a correction will happen any minute but I just DON'T know what to think any more after seeing this. Not saying BUY BUY BUY now and I think everything is rainbows and unicorns in the TO real estate market (my condo hasn't gone up in value at all in the last year.....it pretty much stayed the same) but nothing HAS TO happen, your guess at the future is as good as mine.
By the way, as some of you might know I am currently in Sydney, Australia working. Been here for a month now and I will be here for another month still. Sydney shows up on many "Top 10 Most Expensive Cities to live in" articles. Anyways, compared to here, our real estate prices in Toronto are A JOKE! I'm currently staying in a one bedroom condo downtown (paid for by work
). It's very central, right next to city hall but the actual place is nothing special. It's about 700 square feet if I had to guess so a decent size, and has a nice pool, but the view sucks balls (pretty much get a great view of the building next to it), the kitchen is mediocre (no granite counter tops, no oven, crappy fridge, no freezer!), etc. My place back in Toronto is much nicer than this and similar size, though location wise I'm in Etobicoke and not downtown. My condo in Toronto cost me 300K a year ago. My coworker'splace, which is central (front and Spadina), lake ontario view, 800 square feet, etc. cost him about 365K. I looked up units in this building in Sydney and comparable units cost about 700K!!!!!! Not only that but their intrest rates are almost triple what I'm currently paying in Canada! People here probably earn a little more money than in Toronto but not A LOT more and somehow the economy here is surviving. People aren't loosing their homes, life goes on, etc. I used to be one of the people that though that the market in toronto can't take much more and prices simply cannot go up any more or no one will be able to afford a home so a correction will happen any minute but I just DON'T know what to think any more after seeing this. Not saying BUY BUY BUY now and I think everything is rainbows and unicorns in the TO real estate market (my condo hasn't gone up in value at all in the last year.....it pretty much stayed the same) but nothing HAS TO happen, your guess at the future is as good as mine.
Why is every scrap of available real estate in Toronto instantly turned into a condo? Isn't the condo market saturated? Will it ever slow down within the next 10 years?
That's a very good question. As I was rolling on Gardiner yesterday I couldn't help but ask myself where the people that will live in all those big condo buildings currently under construction (I didn't count, but it was certainly more than five) are going to come from? New immigrants? People leaving suburbia? Coming to the city from rural areas?
Of all the condos that now create a wall on both sides of Gardiner only a handful was there when I landed in 1999. Did the population of this city really increase that much to fill all of them?
Don't get me wrong, I do think that suburban sprawl is unsustainable and we need to learn how to live "vertically" ASAP. Despite that I can't for the life of me figure out what's happening in the heads of those that are buying condos that share the balcony guardrail with Gardiner. Or those like the one recently built on Keele/Dundas W that is practically sorounded by railway tracks and two steep hills on a very busy street, yet far enough away from any decent public transport. Choose your view - railway corridor, 7 track railway intersection, railway overpass, uphill/downhill on Keele, or strip mall/industrial area. The only plus is the gas station right outside the door and Home Depot / CT / Rona / Staples / Futureshop mall a few hundred meters away.
On the other hand, I'm happy that most people don't think like me - it makes my neighborhood a much better place
.
I hear that half of all those condo units are bought by overseas speculators who rent them waiting for that big pay off one day when it's worth twice what they paid for. If they even last that long due to cheap and fast construction.
Cityplace development alone has almost 8,000 units. Downtown highrise residential development is pretty staggering.. there are buildings going up all over the place, probably 100+ projects on the go currently.
Can't say for sure who's buying them all up. I'd say its mostly realtors and investors looking for quick turnarounds (a few years max). Condos, especially all these new fancy (and tiny) ones are a short term investment at best. 10-15 years down the road, they're gonna be a costly maintenance nightmare. 30-40 years they'll probably all be rentals! :lol:
I predict advertisers will rent window space from those Gardiner level condo owners to put up their logos and ads.
