Realestate, Mortgage and Home owners discussion

[Wetundies]

With 1.8mil you can own 6 houses in Vegas.

[nature boy]

[jeSteR]

http://www.theglobeandmail.com/globe-in ... le2425558/

[Duncan]

[nature boy]

[joel]

just saw this:
http://ca.finance.yahoo.com/news/ottawa ... years.html

basiclly, cmhc insured mortgages will now be set to amortize a maximum of 25 years as opposed to 30 years.

[Duncan]

cool, thanks for the heads up. I suppose if i want a 30 yr mortgage, i have to have a minimum 20% down then

[nature boy]

isn't this bad news? maybe i don't understand it all, but wouldn't paying over 25 years be harder than paying over 30? can you even get a 30 yr mortgage anymore?

[joel]

it is bad news for those who want lower mortgage payments and also put down a smaller down payment...

sounds ilke you understand it, a 25-year amortization period, increases the amount you pay month to month for your mortgage. a 30 year mortgage would be more flexible month to month. but overall you'd end up paying more in interest.

yes, you can continue to get a 30 year mortgage so long as the lender agrees to it, and it's uninsured (you've put at least 20% as your down payment)

[nature boy]

i read another article in the sun the other day talking about this.
some guy calculated it out and before this change he could afford a $700k house. after the change, if he puts the same amount down and keeps the monthly payments the same, he can only afford a $550k house. that's crazy man.

it said that with this new change people would have to pony up around 6k more a year or something like that. but i guess it's done in hopes of deflating the market a little bit. we'll see if that happens or not.

[Duncan]

it's not done in hopes of deflating the market (the canadian government actually gets a lot of money with a booming real estate market), but rather a way of protecting canadians from themselves. To keep debt down for the average canadian so we don't see a economic crash like in the states where they were lending hundreds of thousands of dollars to anyone with zero down to buy a house when they worked for minimum wage at mcD's.

but like the article said, the wealthy can still do whatever they want since cmhc only affects those who don't have 20% down.

[nature boy]

oh yeah, you're right, i remembered the article wrong.

i guess that's a good thing too. so now people can't afford to buy a house until they can really afford to buy a house.

[Duncan]

although as a byproduct of the rule, there should be a slight market correction anyways... which is what i'm hoping for haha...

in the meantime, i have to fend off alicia's new car request haha

[nature boy]

hopefully i guess. we'll see.

[joel]