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question regarding mortgage?

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Lightcycle said:
I'm not condoning this at all, but the guy that bought our condo had us transfer the title to his girlfriend's name. He was a flipper, so I think what he was doing was claiming that the condo was the gf's primary residence, so when they flipped it, they wouldn't have to pay capital gains...
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Damn, you really gotta trust a chick to do that. I dunno if I could ever trust someone that's only my gf with that kind of thing. One fight and you just lost $350K.
 
Roasted said:
Damn, you really gotta trust a chick to do that. I dunno if I could ever trust someone that's only my gf with that kind of thing. One fight and you just lost $350K.
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Likely he was already in it balls deep with her. As in, they had lived together for more than 6 months and she could take half his sh*t already. The fact that she was willing to f**k her credit rating if he defaults shows a lot of trust.
 
Brian P said:
Better be careful with that statement ... the Chinese economy is arguably on par with the US economy, and it's growing, and the US economy isn't.
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Hard to trust much that comes out of China IMO.

http://news.investors.com/ibd-editorials/011110-517745-is-china-really-growing-that-fast-.htm

http://www.cbc.ca/news/world/story/2012/11/13/f-arsenault-ordos-china.html

http://www.cbc.ca/player/News/TV Shows/The National/ID/2304698074/

China's fall would be good for no one...
 
I would hope a country with over a Billion people would have a higher GDP than north America, but the per capita GDP of China is $2500, vs $42000 in the usa. Lots more poor people in China than well off.
 
Roasted said:
And if you pay the 300K up front you save ALL the interest but than the whole point of a mortgage is that you don't have the money. I'm on a 30 year variable rate now at 2.15%. I'm happy with it. If I want to pay more I have that option almost any time.
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Put 300k against a 2.15% loan.... or put it into a TFSA, some REITs, or div paying pref's.... can easily earn 7-8%... tax free!?!?
Why are people so quick to pay down their mortgages?
Personally, I have about $130,000 against my house at 2.2%.... Paid the mortgage off a couple of years ago, but then took that money out against it.... put it into a couple of REITs, that are paying me about $1650 a month... tax free.... The cost of borrowing against the house is less than $200... and the interest is also deductable....
My mortgage is paying me....
 
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Red695 said:
Likely he was already in it balls deep with her. As in, they had lived together for more than 6 months and she could take half his sh*t already. The fact that she was willing to ****** her credit rating if he defaults shows a lot of trust.
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About you sig line..... please explain!?
I'm going to guess that you are talking about investing in high yield mortgages? Syndicated, 2nd mortgages, etc.....!?
Am I correct?
 
raginduck said:
Put 300k against a 2.15% loan.... or put it into a TFSA, some REITs, or div paying pref's.... can easily earn 7-8%... tax free!?!?
Why are people so quick to pay down their mortgages?
Personally, I have about $130,000 against my house at 2.2%.... Paid the mortgage off a couple of years ago, but then took that money out against it, HELOC.... put it into a couple of REITs, that are paying me about $1650 a month... tax free.... The cost of borrowing against the house is less than $200... and the interest is also deductable....
My mortgage is paying me....
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The difference is that you already have equity to borrow against. For new owners, no equity = no HELOC. But I agree, the tax-deductible carrying-cost shell-game was one of my favorites (when I had a home).

The heart of this topic isn't what to do with a chunk of money on hand, it's where to allocate monthly income. Pay more of the mortgage (actually more of the principal) off at historic low rates? Or purchase risky investments, chasing after a non-guaranteed 5-7% taxed capital gain?
 
Lightcycle said:
The difference is that you already have equity to borrow against. For new owners, no equity = no HELOC. But I agree, the tax-deductible carrying-cost shell-game was one of my favorites (when I had a home).

The heart of this topic isn't what to do with a chunk of money on hand, it's where to allocate monthly income. Pay more of the mortgage (actually more of the principal) off at historic low rates? Or purchase risky investments, chasing after a non-guaranteed 5-7% taxed capital gain?
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I wouldn't call CDN bank pref's.... risky.
 
raginduck said:
I wouldn't call CDN bank pref's.... risky.
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Any and all blue chip stocks are one rogue airplane, scandal, or hacker away from cutting divs or having its market cap slashed 50%.

The difference is that after said airplane, scandal, hacker has happened, the banks will still chase after you for that mortgage payment.

Don't get me wrong, I'm the poster-child for risk=reward. But the circumstances here are new homeowners who may have very green investment skills and are trying to balance a monthly budget with a new mortgage in hand.

Time enough to play Gordon Gekko when there's more equity built up and the monthlies are all stable.
 
Lightcycle said:
Any and all blue chip stocks are one rogue airplane, scandal, or hacker away from cutting divs or having its market cap slashed 50%.

The difference is that after said airplane, scandal, hacker has happened, the banks will still chase after you for that mortgage payment.

Don't get me wrong, I'm the poster-child for risk=reward. But the circumstances here are new homeowners who may have very green investment skills and are trying to balance a monthly budget with a new mortgage in hand.

Time enough to play Gordon Gekko when there's more equity built up and the monthlies are all stable.
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I actually hadn't read the whole thread until after I posted, didn't see the debates...
The post I qouted mentioned paying a 300k lump up front against a 2.15% loan.

Regarding new home owners... I would suggest that if they have to "try and balance...." than they have borrowed too much. The rule I have always followed, when it was just me, is 2 years salary as a max for borrowing... Since there's been two of us, The rule has been 1 years combined salaries.
 
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raginduck said:
About you sig line..... please explain!?
I'm going to guess that you are talking about investing in high yield mortgages? Syndicated, 2nd mortgages, etc.....!?
Am I correct?
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Yes. For instance, if you took out say 300k equity on your house and put it into some projects in the GTA, usually condo builds, on a typical investment you make 8% annually in cheques paid quarterly with an additional 12% after a three year term at which point your funds are returned. You would get a cheque for 6k every four months and only be paying around $2100 out over those four months in interest based on a 2.5% rate. At the end of the three years you have earned $108 000 and paid out $22 500 in interest, so a profit of $85 500. All the projects I am involved with give you title on land with your investment.
 
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Roasted said:
I have friends that have done this and I honestly DO NOT get it. Do people not value independence and living on their own at all anymore? The reason I stayed with my parents as long as I did was to save for a down payment. As soon as I had that I moved the hell out. Financially it might be a good move but let's be real here, living with parents sucks and YES, you are a looser that needs to grow up if you do this. And this is coming from someone that moved out at 29......I KNEW I was a looser. No denying that.
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Being a loser has nothing to do with living with your parents.

Simple math, move out at 18 and spend 1000 a month for the next 10 years on rent or stay at home and save up $120,000?

But then again this is the generation of buy buy buy, dont worry about paying for anything.
 
Paul1000RR said:
Simple math, move out at 18 and spend 1000 a month for the next 10 years on rent or stay at home and save up $120,000?
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Um, I hope that part of the $120,000 savings is actually going to help dear mum and dad pay for mortgage + utilities...?

At least that was what I was alluding to when I mentioned multi-generations living under one roof.

But then again this is the generation of buy buy buy, dont worry about paying for anything.
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:dontknow:
 
Lightcycle said:
What does taking out equity in your home have anything to do with RRSPs?
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Who is this addressed to? If you are speaking to my response to Raginduck and my sig. then my answer is you can also self direct your RRSP's into these investments.
 
Red695 said:
Yes. For instance, if you took out say 300k equity on your house and put it into some projects in the GTA, usually condo builds, on a typical investment you make 8% annually in cheques paid quarterly with an additional 12% after a three year term at which point your funds are returned. You would get a cheque for 6k every four months and only be paying around $2100 out over those four months in interest based on a 2.5% rate. At the end of the three years you have earned $108 000 and paid out $22 500 in interest, so a profit of $85 500. All the projects I am involved with give you title on land with your investment.
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What percentages of the land title(s)? How many others have a piece of those titles?
 
raginduck said:
Put 300k against a 2.15% loan.... or put it into a TFSA, some REITs, or div paying pref's.... can easily earn 7-8%... tax free!?!?
Why are people so quick to pay down their mortgages?
Personally, I have about $130,000 against my house at 2.2%.... Paid the mortgage off a couple of years ago, but then took that money out against it.... put it into a couple of REITs, that are paying me about $1650 a month... tax free.... The cost of borrowing against the house is less than $200... and the interest is also deductable....
My mortgage is paying me....
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SIGN ME UP FOR THIS, or pm the info. That works out to $20000 / yr = 100% / yr divi's on a $20K TFSA balance (which was all that was allowed until yesterday.....$25500 now).
I thought my 13.8% annual was good. :confused:
 
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