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The Decline of Vancouver.

Dec. 18, 2016, 11:12 p.m.
Posts: 6449
Joined: Nov. 19, 2002

cant say im surprized those, banks have always been for people who have money not those that actualy you know need to borrow…

hate to say it…but here's your chance

Dec. 19, 2016, 6:55 a.m.
Posts: 1254
Joined: Nov. 6, 2006

This is the problem with this plan. A good chunk of the first five years of a mortgage goes to interest and not principal. After 5 years you all of a sudden have about the same amount mortgaged as when you started, but now you have only 20 years left on your mortgage, and it is now likely at a higher rate then when you started. Here come the payments you can now no longer afford…..

they just do another twentyfive year term and put themselves that much farther from having any significant equity in the home. payments don't have to go up.

Dec. 19, 2016, 8:16 a.m.
Posts: 955
Joined: Oct. 23, 2006

they just do another twentyfive year term and put themselves that much farther from having any significant equity in the home. payments don't have to go up.

Unless the house falls in value and the bank requires additional capital to renew. But real estate always goes up so that's definitely not a problem.

Dec. 19, 2016, 9:11 a.m.
Posts: 1383
Joined: Sept. 30, 2006

they just do another twentyfive year term and put themselves that much farther from having any significant equity in the home. payments don't have to go up.

Correct payments don't have to go up, but you are now in a 30 year mortgage and even greater levels of debt. It just a terrible policy all around. Will be interesting to see how desperate first time homebuyers are, and how many in fact take the loan.

Dec. 19, 2016, 10:01 a.m.
Posts: 0
Joined: Dec. 27, 2002

Seems "buy now or be priced out forever' wasn't just a sales ploy.

Dec. 19, 2016, 10:19 a.m.
Posts: 955
Joined: Oct. 23, 2006

Seems "buy now or be priced out forever' wasn't just a sales ploy.

Forever is long time.

What happens when old people die and and leave housing stock, if first time buyers are totally and forever priced out?

Who is going to buy the house of the guy that wants to buy my house, if nobody can buy the condo from the girl who wants to buy that guy's house? First time buyers are crucial for upward mobility.

Anything that can't go on forever, won't. I think this new rule is a genuine sign that forever is running out of time.

Dec. 19, 2016, 11:34 a.m.
Posts: 15169
Joined: Nov. 20, 2002

there is always somebody and they just bought my mom's condo, a year ago my sister bought her condo on the same street in a buying frenzy by offering 9K over asking.

So we missed the peak and white rock RE is no longer the bidding/buying frenzy of one year ago, mom's place was 2 months on the market we dropped 12K ended up only 2k lower than we expected which is a pretty reasonable market activity

Dec. 19, 2016, 12:11 p.m.
Posts: 6449
Joined: Nov. 19, 2002

Correct payments don't have to go up, but you are now in a 30 year mortgage and even greater levels of debt. It just a terrible policy all around. Will be interesting to see how desperate first time homebuyers are, and how many in fact take the loan.

I'm willing to bet that many will go for it…most first time home buyers would be younger people and many simply don't understand how interest and loans work. It's pretty easy to have a rosy outlook on the future when you're getting out of an overpriced rental situation, too. Desperation is a bad card to hold..

Dec. 19, 2016, 12:35 p.m.
Posts: 955
Joined: Oct. 23, 2006

… mom's place was 2 months on the market we dropped 12K ended up only 2k lower than we expected which is a pretty reasonable market activity

Nice work. Our place is getting looked at and some other places are selling in our price range which has left us with little competition so I think we are close, and it's clear there's still some action. I think this new deal for FTHBs is going to create some more action at the entry level in the spring, which will enable other sellers to move up the ladder. But I think this is just pulling in future demand, and will simply raise prices by the amount they are giving away pretty much immediately and cause problems when it runs out.

I'm willing to bet that many will go for it…most first time home buyers would be younger people and many simply don't understand how interest and loans work. It's pretty easy to have a rosy outlook on the future when you're getting out of an overpriced rental situation, too. Desperation is a bad card to hold..

I'm willing to bet you are right, and I suspect the demand for condos in the spring will reflect this. And if you were going to buy anyway you'd be stupid not to take it.
Somehow I got through high school knowing how to differentiate an equation but never once did cost/benefit or rent/own analysis, let alone what P/E stands for (phys ed, right?).

Dec. 19, 2016, 1:10 p.m.
Posts: 1668
Joined: Aug. 6, 2009

Somehow I got through high school knowing how to differentiate an equation but never once did cost/benefit or rent/own analysis, let alone what P/E stands for (phys ed, right?).

Bingo! One of the biggest failings of our education system. It could be argued that parents should be educating kids about that part of life, but a lot of them don't really understand how it all works either.

Dec. 19, 2016, 2:36 p.m.
Posts: 12817
Joined: Jan. 27, 2003

If someone was looking to get into a condo this Spring would there be any reason to take one of these loans if they already have a 20% down payment? Would there be overall savings on interest?

www.natooke.com

Dec. 19, 2016, 2:41 p.m.
Posts: 14407
Joined: Feb. 19, 2003

If someone was looking to get into a condo this Spring would there be any reason to take one of these loans if they already have a 20% down payment? Would there be overall savings on interest?

Potential headache in 5 years if you aren't prepared for it, but yes, you'd save the interest costs on up to 37K for five years from what I read. What's that, 1500/year?

Depending on your salary/tax situation I would look into putting 25K into your RRSP, then borrow from it through the standard first time homebuyer plan.

Dec. 19, 2016, 3:09 p.m.
Posts: 0
Joined: Sept. 20, 2006

I'm willing to bet that many will go for it…most first time home buyers would be younger people and many simply don't understand how interest and loans work. It's pretty easy to have a rosy outlook on the future when you're getting out of an overpriced rental situation, too. Desperation is a bad card to hold..

I'm on the other end: responsible. All I see is the BC gov. giving me free money (below market lending) that will reduce the front loaded interest on my mortgage and make it possible to achieve 20% downpayment on my own. In the correct-use scenario, you avoid paying mortgage insurance, reduce mortgage interest, and pay back the loan instead of doing accelerated mortgage payments. My issue right now is getting 20% DP, not making monthly mortgage/strata/tax/etc payments; I already do that in the form of rent.

The biggest issue facing most FTHBs today is property de/valuation risk. What will the market do? Are you prepared to lose equity? What does renting long term and stashing money into investments look like? And the list of what-ifs go on and on.

Dec. 19, 2016, 3:22 p.m.
Posts: 15019
Joined: April 5, 2007

If someone was looking to get into a condo this Spring would there be any reason to take one of these loans if they already have a 20% down payment? Would there be overall savings on interest?

You don't qualify.

LOLASIA

Why slag free swag?:rolleyes:

ummm, as your doctor i recommend against riding with a scaphoid fracture.

Dec. 19, 2016, 3:29 p.m.
Posts: 3556
Joined: May 23, 2006

What does renting long term and stashing money into investments look like?

Who has $ for that?

The Canadian Payroll Association regularly tracks people’s financial stress and its recent survey revealed 48 per cent of people said “..it would be tough to meet their financial obligations if their paycheque was delayed even by a week. Almost one-quarter doubted they could come up with $2,000 for an emergency expense in the next month.”

MURRAY DOBBIN

NDP housing critic David Eby called the province’s announcement “completely bizarre.”

He said the loans would push prices up as more people would be able to compete for a limited number of units. “It’s an incredibly poorly thought out policy,” he said. “This announcement does nothing about supply… No additional housing has been created.”

He said that while many buyers will likely welcome the announcement, it really is a gift to condo developers, real estate agents, mortgage brokers and lenders.

https://thetyee.ca/News/2016/12/15/BC-Homebuyer-Loan-Bizarre/

Freedom of contract. We sell them guns that kill them; they sell us drugs that kill us.

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