Home buying - 300K house or 400K house
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Posted on: 17-06-10 19:31:34
Quote:
Originally posted by rahul_singh23
"There is not one time in history when a bubble has not burst. When bubbles burst, they not only fall back to their mean average, they usually drop well below it."
When govt tries to work against free market ( low interest rates, 0/40, 5/35) leads to longer recession and more people got suck into this bubble. But what govt can do when 50%+ voters are on bubble side.
Every month we would see new data/reports which make us similar to US cities. Home ownership is not a human right but a privilege which comes with lot of financial discipline and responsibilities. But our govt, brokers, banks, CMHC and buyers made DEBT (Mortgage) available for anyone who can fog the mirror in winter.
Quote:
Originally posted by ashedfc
So, if you are buying to live: pick is spot a buy it (price does'nt matter, negotiate the mortgage in such a way that, even if you loose your job, you should be able to afford your home).
Price is the most important thing that matters. Debt is constant when buyer sign the paper, but its evaluation with interest change with time.
if house price is 15-20% down and interest rate is 1 or 2% higher which makes more sense when you are having good down payment?
You can not compete with the people who has nothing to loose so wait for right time when these people are not eligible to compete.
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Calgary's residential MLS sales plummet in May: CREA
http://www.calgaryherald.com/business/real-estate/Calgary+residential+sales+plummet+CREA/3160664/story.html
18.7% drop almost four times the national average
Indeed a great analysis. Thanks very much Rahul for updating.
Do you think the impact could be more severe?
What could be result of the of following: New Austerity Measures Sweeping The Globe
Hard to believe? Then take a closer look at the sudden rush to austerity announced just in the past few weeks …
Greece has finally bowed to unrelenting attacks from global investors and is slashing 30 billion euros from its budget in three years.
Spain, also under massive pressure from investors, has announced spending cuts of 15 billion euros, plus a 5 percent reduction in public worker wages.
Portugal is getting ready to embark on a program to cut 2 billion euros this year alone.
Italy is slashing 25 billion euros from its budget over the next two years.
Germany, supposedly the most robust of all euro-zone countries, has no choice but to follow a similar path — cutbacks of 85 billion euros by 2014.
And this is just the beginning.
In the UK, newly elected Prime Minister David Cameron has wasted no time in confessing that Britain’s financial situation is “even worse than we thought.” He has blatantly declared how sharply he’s going to break with his predecessors on stimulus programs … how hard he’s going to slam down on the brakes, and … how quickly he’s going to prescribe a harsh regimen of spending cuts.
Expect cutbacks of at least 6.2 billion pounds this year alone.
In Japan — where newly installed leadership is also trying to make a clean break with the past — we see the same pattern: Late last week, Prime Minister Naoto Kan pulled no punches in declaring that …
Japan’s “outstanding public debt is huge” … Its “public finances have become the worst of any developed country” … And the entire country is at “risk of collapse.”
Even in Washington, voices advocating a second round of stimulus have suddenly gone silent. According to the New York Times,
“At a moment when many economists warn that the American economic recovery is likely to be imperiled by prolonged high unemployment and slow growth, President Obama is discovering that the tools available to him last year — a big economic stimulus and action by the Federal Reserve — are both now politically untenable.
The mood in both parties of Congress has turned decidedly anti-deficit, meaning that the job-creation programs once favored by the White House and Democratic leaders in Congress have been cut back, then cut again.
Do you think - Will politicians in Washington, Tokyo, London, Berlin, Rome, Lisbon, Madrid, or Greece cut enough to restore fiscal balance?
These governments are the ones that injected the mega doses of stimulants into the bloodstream of their economies last year. And these governments are also the ones that everyone hoped would provide the NEXT big fix.
Now, even if they don’t cut their budgets by a penny — even if they simply fail to renew their stimulus programs — the impact could be severe.
Repeat - Do you think the impact could be severe?
Thanks,
Very interesting analysis from HD Dent.
must watch May 2010 video
http://www.hsdent.com/free-downloads/
"Deekhavo pe na jao apni akal lagao"
Thanks Kalia, hopesrforever27 and ashedfc for great links.
I think our discussion is moving into 2 directions….
1. Investment
2. Real Estate
Investment:
There are few financial advisors on this site and I think we should discuss with them how they see future. I am not into this profession.
Do we get out from stock market??.. Are we seeing double dip recession??... do we still believe in growth/balance fund portfolio, long term investment??…..
I am not a big fan of long term investment portfolio or smarty banker’s portfolio shuffling strategy at every quarter. Most of the financial advisors at the banks are just sales man. A very good financial advisor will not talk to people if you don’t have 150-200K to invest. The strategy for keeping money in long term portfolio but moving from growth to balance to yield is not going to work in this market when we don’t know what is going to happen after 3 months.
We need to make 10% return to move our money from $100 to $110. If we follow long term investment idea then your money will go $90 and it needs 22% return to reach $110. If you loose 20% ($80) then you need 37% growth to reach $110. It's important to think how to minimize the losses than think about loosing value. But how…..
Active management?? Get out from standard Mutual funds long term investment concept?? Park the money into short term GIC? Move into ETF?
Real Estate:
I am not a RE expert or salesman.
It was running on socialist agendas by Freddie, CHMC, buyers’ tax credit, low interest rates, easy approval. 90% homes (in last few yrs) are insured by govt or their agencies. All the newspapers were filled with stronger RE sale in USA. But what happened now when home buyer tax credit expired and there are no more stupid new ideas by RE industry.
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http://www.greaterfool.ca/
This is no ordinary real estate correction. It’s the shuddering end of a whole epoch. The age of the house is ending, since this asset depended on continuous inflation, endless economic growth, romping personal incomes and investor confidence. Today, rising rates, higher taxes, too few jobs, debt-drenched households and negative demographics mean real estate is cooked.
I am looking for a good mortgage broker - can the experts advise.
Look out for two ID' s on this site
Pramod Chopra
Blue_Peafowl
Quote:
Originally posted by birentoronto
I am looking for a good mortgage broker - can the experts advise.
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Growing Old Is Mandatory ..Growing UP is Optional
What does amortization mean? Say I get a mortgage with TD of 35 years of amortization. The mortgage is 5 years fixed.
Say after 5 years, the mortgage comes up for renewal.
This time around I have saved, inherit etc - and I have the remaining sum of money.
Can I go ahead and change it from fixed to open and then pay of a portion or all of the mortgage?
Thanks
Quote:Yes, once your term is over and you are negotiating a new mortgage, you can go for whatever amortization, term, type that you want.
Originally posted by birentoronto
What does amortization mean? Say I get a mortgage with TD of 35 years of amortization. The mortgage is 5 years fixed.
Say after 5 years, the mortgage comes up for renewal.
This time around I have saved, inherit etc - and I have the remaining sum of money.
Can I go ahead and change it from fixed to open and then pay of a portion or all of the mortgage?
Amortization is simply the period of time it takes to discharge the mortgage debt.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
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