bigpoppa
Well-known member
in my experience, theres a lot of talented labor out there, good businessmen? few and far in between
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COVID and the housing market
- Thread starter mimico_polak
- Start date
AllistonGT
Well-known member
Talented labor and good work ethic are two different things. I agree on the business owners comment.
Broke ours in December also and it was only a year old mortgage. I already had a great rate when it was redone last year but the rates are so low now the cost to break (banker had authorization to lower it to $1000) made better sense when we moved into our new home.
Bank wants car sized chunk of money to break our 4 year mortgage one year in. Boo to that. As MP said, better to put that much money into principal.
Were you variable or fixed? If variable than 3x interest payments I could swallow. $21k (with 8k out of pocket) I could not.
For the first time ever for me I went Fixed as at the time the rate was so good I couldn't pass up a Fixed rate. Who could've predicted in August '19 the world would have gone this way with rates
You’re lucky it was only 13k. Honestly I would’ve paid the 21k if It was just added to the mortgage. But the 8k cash layout didn’t make sense to me, I’d rather control the payments. We could drop our payments for $400/month basically after the small additional payments.
@Hardwrkr13 same for us....took the 2.79 fixed....who would’ve thunk it.
48Connor
Well-known member
Yeah but for me at least because of the size of my mortgage, the 1% rate reduction wouldn't have saved me $13k over 5 years. Didn't make sense to do it.
$400/month reduction for you would be a fair bit though.
No. If we renewed right now with no fees it’s 400/month without penalties. That’s why I’m willing to eat the payment for the next 3 years because even pumping in 200-300/month extra will save me more than the 21k I’d have to pay.
When it’s time to renew in 5 years I’ll go back to 30 and pay it as if I’m doing 25 year amortization just to speed it up.
48Connor
Well-known member
Ah I didn't fully read your message - I see what your saying now!
I should start putting more per month into my mortgage like you, but I keep finding other things to buy... My recommendation is don't buy a Jeep, mods are expensive haha
Gal in our social circle is a mortgage broker, works outside but with the banks here in Oakville. She says asking price is just the introduction estimate, in no way a reflection of what it will sell for.
When I was looking for town houses down here (bronte) , two bedrooms, two baths, no parking and 1/2 garage was starting at 1m.
Friend we hang out with bought a new build on bronte road just north of the qew, bought on paper for 1.6mil. Its 60% done and could get 2mil quite easily. she's in no hurry, figures it will be 2.3-2.4 by July when finished. There is no ceiling on prices here right now.
@GreyGhost, I'm in a 2bedroom, 5 bath townhome. They are built for the older population that would crap thier pants if the toilet was up 2 flights of stairs.
PS, I do get how ugly the market is right now for anyone to get in, i've been here since last February and the value on paper has gone up $250k . Very few can save 250K to keep up with the market,
PS, I do get how ugly the market is right now for anyone to get in, i've been here since last February and the value on paper has gone up $250k . Very few can save 250K to keep up with the market,
On our last mortgage (380k) we took out a short 2 year term at 2.29% and were adding anywhere from $200-400/month during that time. Our amortization went from 25 years down to 17 within a 2 year span. And this was not every month.
The amortization really drops fast when you pump in any funds at the beginning of the mortgage. Remember, every dollar over and above the minimum payment goes into the principal only.
In addition, when it came time to renew, we were at 17 years, but since the rates went up, we resumed it back to 25 years but paid it at a rate of 17 year amortization. Within less than a year we shaved off another year. It really adds up fast, even with $50/payment it makes a significant difference.
I can't believe this 2.99% and you want to renew for lower. Here I am dating myself but my first mortgage was just under 12% and at the time my coworkers thought I was hero to negotiate that. I would think when you're going from 2.99 to 1.99 you're starting to edge up against the law of diminishing returns.
That said none of my mortgages would have been anywhere near the amounts needed today.
That said none of my mortgages would have been anywhere near the amounts needed today.
Bet your first mortgage wasn't 7-figures.
1% on that large a figure adds up over 30 years...
At the beginning of the mortgage, the diminishing returns are still astonishing. I went from 3.49 (crap mortgage broker rate) to 2.72 and that reduced mortgage payments by almost six figures over the amortization period. Going to 1.99 would save hundreds a month in interest that would then hammer the principal.
I was talking this through with my brother. Owning a home, I pay interest instead of rent. Thankfully my interest is much lower than rent but still a solid chunk of money every year that is lit on fire.
Yup. It doesn't sound like much....but I've had the discussion with the older generation and the argument always goes...
Old: When I was your age I could afford a home with no issues
Young: Yup, you sure did. How much was your house?
Old: 100k (or whatever) and we had to pay 18% interest. You're so lucky to only have 3%
Young: Sure am, do the math on 100k @ 18% and 700,000 @ 3% and let me know.
Old: You kids these days, always complaining! Never happy! Pull yourselves up by the bootstraps! Less avocado toast! Less Starbucks and you can afford anything you want.
Young: *eye roll*
EDIT: For kicks
1. 100k with 10% down at 18% = $626/bi-weekly
2. 700k with 10% down at 3% = $1,418/bi-weekly
Haha. I don't think I've ever had avocado toast. Maybe once in Seattle a decade ago.
I didn't know it was a thing...just heard about the joke to millenials...eat too much avocado toast, that's why y'all are broke.
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