Buying my first home. Need Advice.

[Meback]

Hey guys,

I am thinking about buying my first home, but I really need some advice. I have no idea of how to strategically budget this. I am thinking of buying a townhouse for approximately 280,000.

I have about $55,000 saved up, and make about $2500 a month. I wanna pay about 1200 a month on the morgage alone, not including utilities, and I would most likely share the accomadation with a roommate.

-How much do you guys think I should put down as a down payment?

-How long should the term of my morgage be, and how long should it be amoritized for (if that makes sense, I still don't understand what amoritization is)?

- Realistically how much would I have to spend on a lawyer and on a realtor?

- How much money should I have on the side as an emergency fund?

- Are they any other hidden cost?

- typically how much are condo fees, and what does this cover?

(Please don't take into account the cost of applicances, furniture, entertainment systems, bedroom sets)

[Jim Rome99]

Read this before you do anything else.

http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html

[Jim Rome99]

You make only $2500 a month? I hope you mean net, not gross. If you're only grossing 2500 a month forget about owning a 280k house.

[Meback]

Originally posted by Jim Rome99
Read this before you do anything else.

http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html

I have ABSOLUTELY nothing in RRSP. I have a contribution room of about 19,000.

[Meback]

Originally posted by Jim Rome99
You make only $2500 a month? I hope you mean net, not gross. If you're only grossing 2500 a month forget about owning a 280k house.

Yes, net income.

[Jim Rome99]

If you have 55k to put down on a house, you should buy 19k worth of RRSPs, wait 90 days, then withdraw the money through the HBP and buy your house with that.

Thank me when you get a huge ass tax return next April.

[t-im]

A lot of those questions can be answered by a mortgage broker.

Condo fee's vary building to building. Usually with townhouses it covers maintenance and insurance, you pay utilities.

As a buyer, a realtor will cost you nothing.

[Mys73ri0]

a lot of your questions can be answered by a mortgage broker or someone at any of the big banks... the answer to ALL your questions can be had WITHOUT doing a credit check/pre approval, so don't get suckered in by that...

also, don't buy your townhouse/condo with someone else unless you're married... everyone thinks its a good idea but it never is...

http://forums.beyond.ca/st/307571/my...-the-mortgage/

[Meback]

any recomendations on a broker?

[Pacman]

A data point for you:

I pay $385 in condo fees and that includes heat, water and electricity.

[roopi]

Originally posted by Jim Rome99
If you have 55k to put down on a house, you should buy 19k worth of RRSPs, wait 90 days, then withdraw the money through the HBP and buy your house with that.

Thank me when you get a huge ass tax return next April.

If you can wait the 90 days you should definately do this. You will be required to repay to your RRSP over the next 15 years however it is worth it.

Instead of a mortgage consider a HELOC. Put $55000 down when purchasing the house and you have access to the equity if needed. I don't recall how much you have access to but a mortgage broker can you answer these questions as well. The only risk you take with a HELOC is interest rates rising (which they will) but it may work out for you if you're willing to take on the risk. Again I'm not sure if you qualify with the down payment you have though.

[Meback]

What are the advantages of doing the HBP. How much would I get back in taxes (approximately)?

[broken_legs]

Originally posted by roopi


If you can wait the 90 days you should definately do this. You will be required to repay to your RRSP over the next 15 years however it is worth it.

Instead of a mortgage consider a HELOC. Put $55000 down when purchasing the house and you have access to the equity if needed. I don't recall how much you have access to but a mortgage broker can you answer these questions as well. The only risk you take with a HELOC is interest rates rising (which they will) but it may work out for you if you're willing to take on the risk. Again I'm not sure if you qualify with the down payment you have though.

You will only have access to anything over 80% equity unless you pay CMHC for a high ratio financing.

The fees for anything over 80% are pretty serious - ie 5-10-15k etc...

So assuming you have 55k down, the ma house you can buy is going to be 275k (not including legal and relator commisions etc...) So assuming allt hat jazz in about 10k, the max house you can buy is only 265k.

Now if you want to have access to any equity in that house, with only 55k, you're going to have to find a cheaper house ie - if you bought a 200k house, you'd have about 13k equity.

[roopi]

Originally posted by broken_legs


You will only have access to anything over 80% equity unless you pay CMHC for a high ratio financing.

The fees for anything over 80% are pretty serious - ie 5-10-15k etc...

So assuming you have 55k down, the ma house you can buy is going to be 275k (not including legal and relator commisions etc...) So assuming allt hat jazz in about 10k, the max house you can buy is only 265k.

Now if you want to have access to any equity in that house, with only 55k, you're going to have to find a cheaper house ie - if you bought a 200k house, you'd have about 13k equity.

Thanks for clarifying.

[Xtrema]

Originally posted by Meback
What are the advantages of doing the HBP. How much would I get back in taxes (approximately)?

If you are netting $2500/month, I guess you make around $44K a year. Putting $20K in an RRSP will net you around $6000 in tax refund.

IMO, unless you have other income, you will have tough time affording $280K home.

$1200 + $300 = $1500 just for the house and leave you with $1000 for food and car. A roommate is definitely recommended.

[kaput]

.

[Meback]

Originally posted by kaput
Here are some good statistics about the current market for you to consider. Draw your own conclusions.

http://calgaryrealestatereview.com/

You trying to tell me to wait it out?

[barmanjay]

Originally posted by Xtrema


If you are netting $2500/month, I guess you make around $44K a year. Putting $20K in an RRSP will net you around $6000 in tax refund.

IMO, unless you have other income, you will have tough time affording $280K home.

$1200 + $300 = $1500 just for the house and leave you with $1000 for food and car. A roommate is definitely recommended.

I just pulled pout my mortgage calculator

I'm not a mortgage broker,.. but keep it for hypothetical situations like this.

afaik: some lender will allow a gross debt ratio of 40%

32% of 44k/yr gives a monthly payment of 1173.33/mo.

over a 35 yr amort and lets say a 4.25% fix rate, he would theoretically qualify for a loan of $257,518.00

add his $55k down and he has a $310k max budget

he can find some nice townhouses for that much

[kaput]

.

[Mitsu3000gt]

If you can make more than the interest % you pay on your mortgage with other investments, take out a nice long mortgage like 35 years.

Also when approving you for a mortgage the banks assume all your credit cards and LoC's are maxed, so you can lower your limits on those if you need to raise your approval amount a little bit. At least that's what they did for me.