Gregoire Posted March 31, 2011 Report Share Posted March 31, 2011 I'm finally tacking the next step towards being an adult and buying a house with my fiance. For the past 5 years I have been living in a condo downtown, but realized that if we are going to start a family, and live together without driving each other we need more space. After unsuccessfully looking in the burbs ";we" decided (yes that is the executive we) that the commute to work would be too hard to manage. We decided on a place on the Danforth. It is a bungalow with 3 parking spots and a garage (for my future boat that I will not be able to afford any longer). The property needs a bit of work though, hopefully we can do a bunch ourselves and stick to a budget for the rest. Since this site is full of people with much more life experience than me, I'd like to ask if anyone has advice to pass along to me, in terms of what to expect with this move. Link to comment Share on other sites More sharing options...
crappieperchhunter Posted March 31, 2011 Report Share Posted March 31, 2011 First of all congrats It's a big step for everyone. I'm no expert but the best advice I got was take a 5 year term for your first ammortization period. Gives you 5 years to settle into your home and your new life and routines. Then when you renew....knock 5 years off your Amm. So if you start with a 25 year and sign a 5 year term you will be due for renewal at 20 years. At this point change your Amm to 15 years. You will NOT have a problem with the larger payments unless mortgage rates go crazy...but it will knock years and a lot of coin off your mortgage. Also I would recommend paying rapid weekly payments. Another thing that I think is brilliant but I never did it because my house was brand new when I bought it was budget every year for some renovation. A work friend of mine has done this every since he bought his home 15 years ago. He budgets 2 grand a year...ballpark... for some home improvement...doesn't matter what it is..just budget for it...and you will always keep your home up to snuff. We never did that and now 22years later EVERYTHING needs updated or fixed Debbe has the MOTHER of all honeydew lists made up for me and I could keep myself busy for the next 5 years with it. Whatever you do.... enjoy your home and again congratulations. Link to comment Share on other sites More sharing options...
mercman Posted March 31, 2011 Report Share Posted March 31, 2011 Congrats !!!! Pay your mortgage weekly of bi-weekly.Figure it out, you will save literally thousands over the course of your mortgage.Plus, its easier to budget on a weekly basis.It all depends on your pay schedule however.Weekly or bi-weekly. Most of all, enjoy your investment Link to comment Share on other sites More sharing options...
Terry Posted March 31, 2011 Report Share Posted March 31, 2011 you are about to enter into the biggest financial obligation of your life not the house but the women a house you can pay off and still own it and use it once you pay the women off..it means they can't take you any more. and they move on....... just kidding Link to comment Share on other sites More sharing options...
Gregoire Posted March 31, 2011 Author Report Share Posted March 31, 2011 Planning on doing weekly payments. Also going to do some renos soon after buying. Not sure if they are going to be immediate or not, as the house is livable and I've been told that you should live in your house for a bit to decide what you want to do. That part about 2 grand a year for reno budget is great advice, especially since this is our first house and we will probably be upgrading in 5-10 years. Keeping the house up to date means that we won't have to upgrade it when selling. Link to comment Share on other sites More sharing options...
Pikeslayer Posted March 31, 2011 Report Share Posted March 31, 2011 Never, ever, never under any circumstances ever forego a home inspection. Never, never,ever! Did I say never? Slayer Link to comment Share on other sites More sharing options...
Banger68 Posted March 31, 2011 Report Share Posted March 31, 2011 Do not over extend yourself. Try and keep a comfortable budget. If it's too tight it makes ownership miserable. Be honest with yourself. Link to comment Share on other sites More sharing options...
jjcanoe Posted March 31, 2011 Report Share Posted March 31, 2011 all of the above AND (most importantly) get the boat first! Link to comment Share on other sites More sharing options...
cowanjo Posted March 31, 2011 Report Share Posted March 31, 2011 First of all congrats It's a big step for everyone. I'm no expert but the best advice I got was take a 5 year term for your first ammortization period. Gives you 5 years to settle into your home and your new life and routines. Then when you renew....knock 5 years off your Amm. So if you start with a 25 year and sign a 5 year term you will be due for renewal at 20 years. At this point change your Amm to 15 years. You will NOT have a problem with the larger payments unless mortgage rates go crazy...but it will knock years and a lot of coin off your mortgage. Also I would recommend paying rapid weekly payments. Another thing that I think is brilliant but I never did it because my house was brand new when I bought it was budget every year for some renovation. A work friend of mine has done this every since he bought his home 15 years ago. He budgets 2 grand a year...ballpark... for some home improvement...doesn't matter what it is..just budget for it...and you will always keep your home up to snuff. We never did that and now 22years later EVERYTHING needs updated or fixed Debbe has the MOTHER of all honeydew lists made up for me and I could keep myself busy for the next 5 years with it. Whatever you do.... enjoy your home and again congratulations. This has some great points - pay biweekly on day you get paid. Dont use the mortage ever to buy consumer goods - take a portioned fixed as rates are at a historical low level and residual variable enough so you can smash it down. The second part is tough for me - 2K a year good plan but really any good, i am against this - as after 5 years it is a dated reno anyway and a poor investment in a great deal of cases too many people invest in their properies and would have made it regardless as markets change. If you took the opposite view and put in RRSP at 5% the 2K a year inclusive or reinvesting tax return and compound would be worth a significant chunck. IE Year 1 invest 2K for 22 years at 5% is almost6K Not sure better off doing zero getting lessor gain - or spending 60K now probably the later means all new vs dated? Link to comment Share on other sites More sharing options...
cowanjo Posted March 31, 2011 Report Share Posted March 31, 2011 This has some great points - pay biweekly on day you get paid. Dont use the mortage ever to buy consumer goods - take a portioned fixed as rates are at a historical low level and residual variable enough so you can smash it down. The second part is tough for me - 2K a year good plan but really any good, i am against this - as after 5 years it is a dated reno anyway and a poor investment in a great deal of cases too many people invest in their properies and would have made it regardless as markets change. If you took the opposite view and put in RRSP at 5% the 2K a year inclusive or reinvesting tax return and compound would be worth a significant chunck. IE Year 1 invest 2K for 22 years at 5% is almost6K Not sure better off doing zero getting lessor gain - or spending 60K now probably the later means all new vs dated? Sorry i also missed a step if you are really going to upgrade in 5-10 years why not save the 2K a year and rent out the property after ten years - use any capital appreciation plus mortgage paydown to use as deposit on next place. Dont over extend but you could end up with a nice income stream and properties that you could live in (Too many investors buy property they would never live in which is a massive mistake)> If you think this way you wont do dumb renos which never get a return Link to comment Share on other sites More sharing options...
big mac Posted March 31, 2011 Report Share Posted March 31, 2011 Sorry i also missed a step if you are really going to upgrade in 5-10 years why not save the 2K a year and rent out the property after ten years - use any capital appreciation plus mortgage paydown to use as deposit on next place. Dont over extend but you could end up with a nice income stream and properties that you could live in (Too many investors buy property they would never live in which is a massive mistake)> If you think this way you wont do dumb renos which never get a return Link to comment Share on other sites More sharing options...
big mac Posted March 31, 2011 Report Share Posted March 31, 2011 Not sure if the Govt. still has the RRSP plan for first time buyers, great deal , check it out at your bank before buying, to long to into the details to much but you get to borrow ( interest free ) up to $20,000. and have 15 years to pay it back, bonus is you have a $20,000. RRSP when you are done,,,,,, Link to comment Share on other sites More sharing options...
danc Posted March 31, 2011 Report Share Posted March 31, 2011 Shop around for a good rate. Tell company A that company B offered you a better rate. Then tell company B that company A beat them. Then go back to company B. I did this many times when I had a mortgage and managed to save over 1% of the going rate. Also, never pay a mortgage renewal fee. It`s as simple as telling them that you`re moving elsewhere. Congrats and good luck. Link to comment Share on other sites More sharing options...
irishfield Posted March 31, 2011 Report Share Posted March 31, 2011 You won't get away with parking the boat outside most likely. By-law restriction and anything bolted down will be stolen. House.. $ based on one wage earner or you're fooling yourself. Link to comment Share on other sites More sharing options...
Dara Posted March 31, 2011 Report Share Posted March 31, 2011 Danforth eh....I used to live on DeGrassi street. congrats Link to comment Share on other sites More sharing options...
Gregoire Posted March 31, 2011 Author Report Share Posted March 31, 2011 Never, ever, never under any circumstances ever forego a home inspection. Never, never,ever! Did I say never? Slayer Home inspection is tomorrow. Walking through with my real estate agent. And he's paying for it as a gift. Link to comment Share on other sites More sharing options...
Gregoire Posted March 31, 2011 Author Report Share Posted March 31, 2011 You won't get away with parking the boat outside most likely. By-law restriction and anything bolted down will be stolen. House.. $ based on one wage earner or you're fooling yourself. I did the financing alone to make sure that we are not overextended. If need be I could carry the cost of the home on my income, hopefully this will never be the case. The house has a garage. If the wife will let me this is where the boat will go. Until then I am planning on getting a kayak for the summer. Canadian tire has a decent one for a decent price. Link to comment Share on other sites More sharing options...
dhickey Posted March 31, 2011 Report Share Posted March 31, 2011 house inspection is a must. i have done lots of renos and just shake my head with what people get themselves into with their best intensions in mind. weekly morgage payments are the best way to go. you will get to a piont where you dont even think about it. secure a credit line in order to carry you through unexpected expences or rainy days. dont listen to your bank.(they are in the buisnes of taking your money) buy your boat now. most importantly dont forget about the futer ie. children infants are wonderfull but do cost allot of money in the first 3 yrs. most of all dont become a slave to your debts(it sucks) its a big jump no doubt about that. good luck and best wishes for the future. congrats saltydawg Link to comment Share on other sites More sharing options...
Gregoire Posted March 31, 2011 Author Report Share Posted March 31, 2011 Shop around for a good rate. Tell company A that company B offered you a better rate. Then tell company B that company A beat them. Then go back to company B. I did this many times when I had a mortgage and managed to save over 1% of the going rate. Also, never pay a mortgage renewal fee. It`s as simple as telling them that you`re moving elsewhere. Congrats and good luck. I've been shopping. So far the best I have is .9 below prime on an open variable. I doubt I'll get better than this. I have a few appointments in the next few days. I am pre approved for more than enough so I can wheel and deal a bit. Link to comment Share on other sites More sharing options...
Gregoire Posted March 31, 2011 Author Report Share Posted March 31, 2011 This has some great points - pay biweekly on day you get paid. Dont use the mortage ever to buy consumer goods - take a portioned fixed as rates are at a historical low level and residual variable enough so you can smash it down. The second part is tough for me - 2K a year good plan but really any good, i am against this - as after 5 years it is a dated reno anyway and a poor investment in a great deal of cases too many people invest in their properies and would have made it regardless as markets change. If you took the opposite view and put in RRSP at 5% the 2K a year inclusive or reinvesting tax return and compound would be worth a significant chunck. IE Year 1 invest 2K for 22 years at 5% is almost6K Not sure better off doing zero getting lessor gain - or spending 60K now probably the later means all new vs dated? We already have a rental property. For us this is to live in. I do not go the RRSP route for a variety of reasons, mostly because I am in line for a large pension and feel that a TFSA is a better route. It was a personal choice based on the tax bracket I am likely to be in when I retire. Link to comment Share on other sites More sharing options...
BillM Posted March 31, 2011 Report Share Posted March 31, 2011 Put enough down to avoid the CMHC fees.. Also the limit for the one time RRSP withdrawl is now 25k, minimum amount to avoid the CMHC is 20% down. I also pay my mortgage at a higher rate then I'm actually being charged. This takes a nice chunk out of the principle everytime I make a payment. Gotta remember, you pay the interest first Link to comment Share on other sites More sharing options...
dhickey Posted March 31, 2011 Report Share Posted March 31, 2011 re . house inpectoin always always always use your own inspector or at least one that your bank sudjest . never the realestate brokers inspector. (money talks there/ get the drift) Link to comment Share on other sites More sharing options...
radar Posted March 31, 2011 Report Share Posted March 31, 2011 DON'T GIVE UP THE BOAT! The costs will start to add up and it will get further and further away (or smaller with fewer bells and whistles). I agree don't make any majoir changes yet. Get to know the place. 3 car garage on the Danforth! Good job! Link to comment Share on other sites More sharing options...
Harrison Posted March 31, 2011 Report Share Posted March 31, 2011 We already have a rental property. For us this is to live in. I do not go the RRSP route for a variety of reasons, mostly because I am in line for a large pension and feel that a TFSA is a better route. It was a personal choice based on the tax bracket I am likely to be in when I retire. Sounds like you have things sorted out. A very saavy financial guy broke things down for my young family and recommended we not invest in anything else until all debts are paid(mortgage etc) becasue I have a solid pension plan. Except for RESPs. And I second the boat deal. If you can swing one now, DO IT. Seriously, bindheredunit. Link to comment Share on other sites More sharing options...
Fish4Eyes Posted March 31, 2011 Report Share Posted March 31, 2011 Don't get a home inspection. Majority of these "inspectors" completed a weekend course to become a "home inspector". Use common sense and ispect every square inch of the home inside and out very carefully. My real estate agent told me I was one of a kind and at times insane as I did exactly what I am recommending for you to do . Word of advice, don't bring your wife with you if you do decide to inspect the house by yourself as she will get impatient and rush you. If you really want a home inspection, you would be better off paying an experienced contractor who renovates to have a look and give you his opinion. Things to look into: -how old are the windows? -when was the roof last done? If the shingles are curling at the corners, its time soon. -how old are the AC/furnace? -has the basement ever flooded? Check the grading around the house to ensure water is not pooling towards the foundation. -Does the foundation have cracks in it? If the house is brick, fix any cracks in the grout/brick asap. -does the house have knob and tube wiring (as you mentioned it is older). Is it copper wiring? -does the house have copper plumbing? -make sure the basement does not smell mouldy. -if the basement has lift ceilings, have a look at the wiring to see if there are junction boxes. If there is, it is usually safe to assume the wiring was butched throughout the whole house. -look for mold in the attic -does the house have return air ducts on every floor? If you need a good mortgage rate, I can give you a contact. I got 3.69% 5year fixed in May 2010. Others offered 4%+ at the time. Might be worth it for you to talk to the guy and shop around and compare. PM if you need a contact. Hope this helps bud! Link to comment Share on other sites More sharing options...
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