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Mortgage help, kinda....

Jan. 14, 2015, 11:04 p.m.
Posts: 359
Joined: June 11, 2007

Me and the wife live in a townhouse. We would like to get into a house with a suite. My idea to increase my down payment is to pull out of the market for 1 year and live with moms. I could bank 30k in that year and possibly invest or just bank the funds from the sale for that year. Im a pretty smart guy and I know a lot of things but feel fairly foolish that I dont know more about investing my money. would and investment of 45k make any money in a year without much risk. Does this even sound like a wise plan. Im thankful for any advice.

http://carcraftautorepair.ca/

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Jan. 15, 2015, 1:48 a.m.
Posts: 0
Joined: May 8, 2009

He has lots of ideas that will help you get into that house. Long term investing not risky. Short term investing is a crap shoot. There are plenty of shysters who will gladly take your money and tell you tales of fabulous short term returns. Don't take the bait.

Jan. 15, 2015, 8:08 a.m.
Posts: 1521
Joined: Nov. 21, 2002

If you have $45k that you want to use in a year, you want to put it somewhere very low risk. Low risk = low return. Something like a GIC or a high-interest savings account. You'll get somewhere in range of a 2% return, or $900.

Anything with the possibility of a higher return will come with greater risk. For example, you could put your $45k in a some form of stocks, which have the potential to gain say 5-10%. They could also lose 20% just as easily. The equity markets are extermely difficult to predict even though a bunch of clowns on TV will tell you they can do it. The upside of higher risk investments is that over the long term (think 5-10+ years) they have a very high probability of offering higher returns.

Bottom line, if you need the money in a year, put it somewhere safe and be content with modest gains. Don't invest it somewhere promising 10% returns in a year, because you're gambling at that point.

Way back from the old school days of NSMB…

Jan. 15, 2015, 8:12 a.m.
Posts: 1313
Joined: Feb. 17, 2009

Anything with the possibility of a higher return will come with greater risk. For example, you could put your $45k in a some form of stocks, which have the potential to gain say 5-10%. They could also lose 20% just as easily. The equity markets are extermely difficult to predict even though a bunch of clowns on TV will tell you they can do it. The upside of higher risk investments is that over the long term (think 5-10+ years) they have a very high probability of offering higher returns.

Can confirm, equity markets are difficult to predict. We only advise clients to invest if they have a 5 year + horizon. I (along with many on the boards) would caution you to stay away from equities if you are risk averse.

Source: I work for a mutual fund with one of the best historic performance records in the industry.


"I know that heroes ride bicycles" - Joe Biden

Jan. 15, 2015, 8:49 a.m.
Posts: 359
Joined: June 11, 2007

Ya pretty much what I was thinking. Low risk, low reward makes sense. Figured I may as well put it some where for the year. Plan on selling this spring and then save for a year. Anyone have any luck leveraging banks against each other to get a better mortgage rate. My last 2 mortgages I just went with my bank (rbc) simply because I dealt them them already. Considering how much difference it makes Im going to shop around and go with the best rates possible. Crazy to think I wouldn't have done that before.

http://carcraftautorepair.ca/

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Jan. 15, 2015, 9:05 a.m.
Posts: 7707
Joined: Sept. 11, 2003

Ya pretty much what I was thinking. Low risk, low reward makes sense. Figured I may as well put it some where for the year. Plan on selling this spring and then save for a year. Anyone have any luck leveraging banks against each other to get a better mortgage rate. My last 2 mortgages I just went with my bank (rbc) simply because I dealt them them already. Considering how much difference it makes Im going to shop around and go with the best rates possible. Crazy to think I wouldn't have done that before.

Get a mortgage broker or brokers. Its zero cost, zero risk. You can say "no" to their offers and they get paid by the lender. If the price of oil keeps going down, interest rates may come down, and mortgage rates with them. Also, you could benefit from the sale of your property if interest rates go down, as it tends to trend house prices upwards. So you look to be in a pretty good spot - unless the Canadian economy tanks suddenly. I don't think the Canadian economy will tank anytime soon (outside of Alberta and Sask) because low oil prices stimulate the economy of the US - our biggest trading partner and drives up the $USD, making our goods and services cheaper for Americans. **Just my personal opinion, in no way should be taken as financial advice****

Jan. 15, 2015, 11:02 a.m.
Posts: 359
Joined: June 11, 2007

No rentals allowed in my complex. If they did I probably wouldnt even sell, Id just keep renting it and buy a second place.

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Jan. 15, 2015, 11:06 a.m.
Posts: 17777
Joined: Oct. 28, 2003

Theoretically, a TFSA with $36k ( your contribution limit if you don't have a TFSA yet) of VAB bond index fund will create $976 tax free income in a year, and only loose initial value if interest rates go up.

Her TFSA with another $15K of VAB will make $444 income.

Both of these run through BMO investor line will cost $40 in transaction fees if done in one lump sum.

https://www.vanguardcanada.ca/individual/etfs-detail-overview.htm?portId=9552

Jan. 15, 2015, 11:29 a.m.
Posts: 14406
Joined: Nov. 20, 2002

Ya pretty much what I was thinking. Low risk, low reward makes sense. Figured I may as well put it some where for the year. Plan on selling this spring and then save for a year. Anyone have any luck leveraging banks against each other to get a better mortgage rate. My last 2 mortgages I just went with my bank (rbc) simply because I dealt them them already. Considering how much difference it makes Im going to shop around and go with the best rates possible. Crazy to think I wouldn't have done that before.

depending on your situ and what is going on at the time you need to renwew it might be better to stick with the bank you are with or go variable or??

Try the mortgage broker for sure

RB used to have independant mortgage brokers on contract in their banks (still like that?) and they were very competitive, the guy I dealt with saved me $, handed me the official RB rate sheet and said "yeah just knock X% off any of those numbers"

Now with ING found them really competitive, you apply on line [HTML_REMOVED] fax, really good easy to deal apply and deal with afterwards, I've dealt with a mortgage company that sucked after you sign …especialy if you are trying to switch to a different company

Jan. 15, 2015, 11:34 a.m.
Posts: 17777
Joined: Oct. 28, 2003

http://kimstrynadka.ca/m/

Kim did a great job getting us the right mortgage.

Jan. 15, 2015, 11:53 a.m.
Posts: 1647
Joined: Jan. 12, 2010

OP is essentially talking about gambling with his current home to try and get a bigger home. Right out of the gates that's a pretty risky move, never mind living with the parents.

I'd say buckle down and accept townhouse life until incomes grow enough to get a home. Better to live with a shared roof than to end up back in the rental market.

Jan. 15, 2015, 12:15 p.m.
Posts: 359
Joined: June 11, 2007

OP is essentially talking about gambling with his current home to try and get a bigger home. Right out of the gates that's a pretty risky move, never mind living with the parents.

I'd say buckle down and accept townhouse life until incomes grow enough to get a home. Better to live with a shared roof than to end up back in the rental market.

Not sure where you got "gambling " from. Im not willing to risk anything really. Im going to sell my place and buy another. Im just going to take a 1 year break in between to save a nice chunk of cash and wondering wheres the best place to put my money for a year. So I don't see how that's risky in any way. Plus living with moms for a year would be great, between her and the wife ill be on easy street for the year lol.

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Jan. 15, 2015, 12:59 p.m.
Posts: 14406
Joined: Nov. 20, 2002

If RE values leveled or are dropping where you live this might be a good time to get out but if you are in Vancover who knows?

I couldn't handle my mother for very long but its good that you can

Jan. 15, 2015, 1:38 p.m.
Posts: 7707
Joined: Sept. 11, 2003

Not sure where you got "gambling " from.

I guess its "gambling" if prices go into the stratosphere in that year. Too bad you can't rent it out. I used to live in a Strata that limited rentals to a certain number at a time. Even if they were at quota, you could plead hardship and have an exception made. Apparently, renting to a family member is also allowed. I also know that places were illegally rented out, I don't think with any consequences, except for the case of problem renters. I'm not saying be a dick, but make sure that the Strata laws about this are absolutely ironclad. For example see

http://railtownlaw.com/2013/05/strata-101-can-i-rent-out-my-condo/

so it might be worth your time and effort looking into (if you already haven't).

Jan. 15, 2015, 3:43 p.m.
Posts: 0
Joined: April 8, 2011

Could you find Family or friends to rent too?
I'd just sell and buy now while the Mortgage rates are awesome…they could go up over the next year which could ultimately eat away (a good portion) of the 30K you just saved or more like "sacrificed" to save.

Plus….no matter how tolerable your in-laws or your parents are , sharing a home makes for an intolerable situation in most instances.

You really need to ask yourself if the 30K is really gonna make that big a difference when it comes time to buy.
30 K amortized over 25 years isn't all that much , in comparison to moving in with Mom.

Take your time, Think it through, good luck Bud

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