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Posts: 602
Location: Amidst a glow in the sky.
Posted on: 22-02-12 15:50:44
Location: Amidst a glow in the sky.
Posted on: 22-02-12 15:50:44
Quote:
Originally posted by BlueLobster
Quote:
In 2007 when I bought a house, everyone was saying marked is going to go down wait for some time...
I'm in the same boat as bhootnath, I only wish I'd bought sooner.
Same here - bought first house in 2007 - wish I had bought sooner!
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Quote:
Originally posted by ashedfc
The current trend is 30years (from 1981 onwards) in the making.... you guys are all talking about couple of years here & there...... the big question is the 30year interest rate trend... once the trend reverses.... prepare for some nasty years (its getting closer by the day)..
This is the last 220 years graph (since 1790), & history is the best proof, history never repeats (but it rhymes)..
http://jugglingdynamite.com/wp-content/uploads/2012/02/long-term-rates-since-1790.png
Nobody I know looks at a 220 yr. graph to make a home buying decision. And nobody I know can predict with any certainty when interest rates will rise again, even if they look at this graph. Can you?
What does "getting closer by the day" mean"? Is there any concrete timeframe? 1 yr., 2 yrs, 5 yrs, 5 centuries? In all cases, the statement is factually correct.
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Are you there?
Quote:
Originally posted by BlueLobster
Nobody I know looks at a 220 yr. graph to make a home buying decision.
now you know somebody does look at 220 yr graph not to make home buying decision.Quote:
Originally posted by san-hugo
Bingo !!
Include this writeup on preface page of Zombie's guide to 'Where can I live? ' and you have a bestseller !
Tre' bien Monsieur Bhootnath !
Merci Monsieur San-hugo!
ok we have to limit this otherwise some folks are ready with tamil script.
Quote:
Originally posted by bhootnath
I don't know which area/what type of house you are talking about where you get an apartment for rent where it will just cost 100,000 for 10 years of rent.
Average2 bedroom condo costs $1400*12=16800 so for 10 years it will be 168000. Now even after speding that money what you have at the end of 10 years..ghanta..babaji ka. so for 10 years you are taking a loss of $168K.
If you buy a house now and corrects by 20% it becomes $400K. lets say it never appreciates. What will be the worst case scenario..?you will be paying around 90K for years in expenses including bank interest whereaas you would have paid $84K in the rent during those 5 years..your loss will be of $106K during initial 5 years..but as years pass by the loss on rental house will keep piling whereas the expenses on house will be lowering as interest charged will be less n less. At the end of 25 years you will have house fully paid...where as for 25 years you will be paying rent and nothing will be there for you.
Simple calculation if you buy the similar condo which you are currently renting for $1400 per month.
the total you will be paying if you buy a condo fo $300K that never appreciates: $450K
The total rent you will pay for 25 years: $420K
After 25 years for the same price you will have your own house if you buy. you will have a ghanta if you rent.
So for a 500K House you will put 20% say $100K. Now over the next 5 yearseven if house appreciates by 4% annually it becomes around $608 less annual expenses including mortgage interest $90K. Total gain of $18K+5 years of rental money for similar condo approx $1400 i.e. $84K so the total benefit of $102K. That too on the downpayment of $100K you doubled the investement. Just increase that number by 1 or 2 % and then see the difference. May be when I get time, will create a spredsheet that will show the benefits of owning a house even if correction occurs. (Not condo though)
To justify your opinion, you can pick 3 bedroom condo and it will cost even more (> $168,000). For one bedroom apartment u don't spend more than $100,000 in rent but for 3 bedroom house you will definitely waste more in property tax,insurance and other unexpected expenses of house.
I never said one has to keep paying rent for 25 years. Renting is the best way to save money and buy house at the right time.
Wait for the correction, it will definitely happen.
Above all renting brings you so many benefits like freedom to move, enjoy vacation.
If not then at the current interest rates everybody would have become home owners.
Quote:
After 25 years for the same price you will have your own house
Then you will realize that you spent your precious years working like a slave to build this useless material. Even after freeing that house you will be forced to pay property tax,insurance etc. The only expense which will go is the mortgage. Other expenses will remain 80% of the renting.
Quote:
Originally posted by web2000
Wait for the correction, it will definitely happen.
Are you freaking kidding ...Nothing is definite, except for death
. People who waited for correction to happen for last 2-5 years already doomed. Lets say 3 years back based on some of the forum here with charts and stats, you put off a decision to buy a house "waiting for THE correction". Houses already appreciated 30% or more. Now even if correction occurs lets say by 20%, you will still be paying 10% more for the same house (3yr older though) and then 3 years of rent, down the drain.....Go ahead wait for THE correction..yeah someday it may happen..may be only for a day...
man...you can lead a horse to water, but you can't make it drink.
It seems there is not a single scenario when a person should not buy home and no-one in GTA (Canada?) has negative equity.
Quote:
Originally posted by bhootnath
Are you freaking kidding ...Nothing is definite, except for death
Go ahead wait for THE correction..yeah someday it may happen..may be only for a day...
man...you can lead a horse to water, but you can't make it drink.
1. Why do Canadian Govt. and BOC feel so worried about Canadian personal debt (highest in western world) and CMHC future?
Bank of Canada issues fresh warning on debt (
http://www.theglobeandmail.com/report-on-business/economy/bank-of-canada-issues-fresh-warning-on-debt/article2347476/)
2. Why did same logic did not work in US and EU countries? Remember very few US states allows walk away.
3. How do you see effect of Canadian sub-prime (0/40,5/35, super low interest rates, 5/30, 5% cash back) when majority of first time buyers are in sub-prime and barely saving anything?
4. What do you think after 5 years when bank figures out there are lot of sub-prime owners have mortgage more than home value and no saving for pay difference?
5. Do you think rent/own (mortgage interest, lost opportunity of down payment, taxes, fees, maintenance, insurance) ratio matters?
6. Does negative equity matter and affect on RE market? Home foreclosures skyrocket in Kelowna
http://www.cbc.ca/news/canada/british-columbia/story/2012/02/15/bc-okanagan-home-foreclosures.html
"People weren't able to achieve their goals in doing this and so they quit making payments," he said.
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