Mortgage Question

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CBRetriever		#61	[-]
Posts: 17226 (04/16/08 8:00 PM) MESS member Reply Quote More Recent Posts Message Connection Block Invite	oh, noooooooooooooooo! that's terrible
MMMadcow		#62	[-]
Posts: 5815 (04/16/08 8:09 PM) Registered User Reply Quote More Recent Posts Message Connection Block Invite	Tell me about it. I'm sure we've missed some great houses, thinking we were set. Now I have to start all over again. I can't take it. Seriously, my neck feels funny. Can you die from your neck feeling tight and funny? Gosh, I hope I wake up tomorrow...
donbrasco4		#63	[-]
Posts: 1366 (04/16/08 8:20 PM) Registered user Reply Quote More Recent Posts Message Connection Block Invite	MMMadcow wrote: I have a question....say a family put an offer on a home, offer was accepted, time ticks by, all is supposedly well. An appointment is made, by the sellers, to sign at THEIR choice of title company. Less than two weeks before closing, we get word that the house doesn't have a clear title, the home is probably going into foreclosure, and our present home is no longer ours as of May 1. Legally, I can hunt down this prick and beat him with assorted sticks, of my choosing. Correct? Does your real estate contract have a break fee? (or cancellation fee, etc., from the buy sell agreement) This depends on the contract though, some have contingencies for these situations. Probably no fun getting a break fee from someone currently 90+ days past due, but worth a shot if its in the contract.
squashthebeef		#64	[-]
Posts: 12626 (04/16/08 8:22 PM) faqmaster Reply Quote More Recent Posts Message Connection Block Invite	Basically I just want a variable rate that is the lowest I can get. Thanks, that was the best laugh I've had all week. Serially.
ripeplum		#65	[-]
Posts: 41 (04/16/08 9:31 PM) Reply Quote More Recent Posts Message Connection Block Invite	A variable rate mortgage up in Canada is actually a very safe mortgage. The Bank of Canada sets it's rates about every 3 months, there are times that there is an unscheduled movement in rates but historically this has been downward to stimulate the economy. Secondly most variable rate mortgages have a lock in feature that would let you lock in at any time - something to consider if rates start to creep up and hit what you would have locked in at had you gone fixed. It doesn't seem that you can compare the American Real Estate system with the Canadian (at least in Ontario). I don't even know what is this escrow you speak of, although I have heard the term, we don't use it here. Another thing is that when you get a variable rate mortgage the bank sets your payment at the fixed rate amount thus making your amortization period lower and protecting the borrower from small rate fluctuations The other side of this coin is more of each payment goes toward principal and saves you a ton of interest over the life of the mortgage. Because Canadians cannot deduct mortgage interest on their income tax they tend not to mortgage to the hilt and stay that way, there is really no benefit. Now on investment properties, people do that all the time, suck equity out as often as possible as the interest paid on investments is tax deductable.
Tres Gay		#66	[-]
Posts: 3141 (04/16/08 9:38 PM) Registered user Reply Quote More Recent Posts Message Connection Block Invite	May I piggy back on this? I have a house in Richmond that I'm keeping. I only owe about $70k on it. After a down payment our new house will have about a $100k mortgage. We can definitely afford both payments and will rent out the Richmond house. Will the bank be more dickish about the mortgage on the second house and rape me with high interest? My credit rating is on the high end of good but is not excellent.
token lunatic		#67	[-]
Posts: 21027 (04/16/08 9:39 PM) Registered user Reply Quote More Recent Posts Message Connection Block Invite	Is there a cap at all on a variable rate, like say 10%?
ripeplum		#68	[-]
Posts: 42 (04/16/08 10:28 PM) Reply Quote More Recent Posts Message Connection Block Invite	Tres up here we get the banks to compete for our business - again at least in my neck of the woods, equity is key in getting a good rate - as long as you have the requisite 20% down and have a decent job the borrower is pretty much in the drivers seat. Sorry, I can't help you there. Token, there is no cap on the variable rate as far as I know but it moves so slowly and infrequently you would have plenty of notice when to lock in. You would have to be a real gambler to not lock in should the rate creep up to what your payments cover and hope they go back down. Frankly it would probably take the whole 5 year term of the mortgage for that to happen. That is another difference. In Canada though we amortize over 25 years (sometimes over 30 but I hate to hear people doing that) most of our mortgages are for shorter terms which you must renegotiate every 1 - 5 years depending on the chosen term. There are just starting to be lenders willing to give a 25 year term, fully closed and I figure thats a horrible deal as you may be in a much better financial position through the years and want to pay down the mortgage but you would be subject to penalties.
CBRetriever		#69	[-]
Posts: 17227 (04/17/08 4:03 AM) MESS member Reply Quote More Recent Posts Message Connection Block Invite	we can pay extra on the principle on most fixed loans thus paying them off earlier w/o penalties - I paid mine off several years before I was supposed to have done so and that was on a 15 year fixed rate mortgage
DylanMcKay6969		#70	[-]
Posts: 108 (04/17/08 6:20 AM) Reply Quote More Recent Posts Message Connection Block Invite	speedyforme wrote: OK so when they ask you for your annual gross income, easy when they ask you for expected heating costs, easy when they ask you about your down payment, easy when they ask you about monthly debt and give car payments, credit card debts, school loans etc. do they just mean obligated debt, not like monthly expenditures right? so say I have no credit card carryover because I pay it off every month, I have no more student loans, I don't have anything on my car because I fully own it etc, does this mean my monthly debt = $0??? When your credit is pulled they will have all the info they need. What is calculated are your minimum monthly payments(all other debts) and your proposed new house payment with taxes and insurance(there is absolutely no reason to have PMI). I use a program called Calyx personally, and after I pull credit and type in how much a borrower earns the program gives me the DTI. If you want to do it yourself, just figure out all your minimum payments and you pre-tax income, any disability or social security you can multiply by 1.25% usually. In your case you have no debt so add up your proposed house payment and if you are spending less than 50% of your income on the house you should be ok. Don't get a variable rate, brokers push them so you keep coming back every few years. Plus you will be fucked if your house depreciates in the next couple years, which could make it hard for you to re-fi and put you at an ungodly rate. Good luck.
MMMadcow		#71	[-]
Posts: 5816 (04/17/08 6:32 AM) Registered User Reply Quote More Recent Posts Message Connection Block Invite	Tres, our loan wasn't contingent on our selling our present home. We got a great interest rate, and no problems, until now. Homelessness sucks ass.
speedyforme		#72	[-]
Posts: 7247 (04/17/08 6:37 AM) Registered user Reply Quote More Recent Posts Message Connection Block Invite	ripeplum wrote: Tres up here we get the banks to compete for our business - again at least in my neck of the woods, equity is key in getting a good rate - as long as you have the requisite 20% down and have a decent job the borrower is pretty much in the drivers seat. Sorry, I can't help you there. Token, there is no cap on the variable rate as far as I know but it moves so slowly and infrequently you would have plenty of notice when to lock in. You would have to be a real gambler to not lock in should the rate creep up to what your payments cover and hope they go back down. Frankly it would probably take the whole 5 year term of the mortgage for that to happen. That is another difference. In Canada though we amortize over 25 years (sometimes over 30 but I hate to hear people doing that) most of our mortgages are for shorter terms which you must renegotiate every 1 - 5 years depending on the chosen term. There are just starting to be lenders willing to give a 25 year term, fully closed and I figure thats a horrible deal as you may be in a much better financial position through the years and want to pay down the mortgage but you would be subject to penalties. THANK YOU. I don't feel so dumb anymore lol. Don't get a variable rate, brokers push them so you keep coming back every few years. Plus you will be fucked if your house depreciates in the next couple years, which could make it hard for you to re-fi and put you at an ungodly rate. Good luck. I don't get this part...
DylanMcKay6969		#73	[-]
Posts: 110 (04/17/08 7:12 AM) Reply Quote More Recent Posts Message Connection Block Invite	I don't get this part... Arms adjust after a few years(they are typically locked for 2 or 3 years) and then you have to re-fi to avoid the rate going skyhigh. If your home appreciates, refinancing is no problem, if it depreciates like a lot of homes are doing then you could be in a bind. Plus why waste part of your equity paying to re-fi your house, get a fixed rate, Arms are a scam.
ripeplum		#74	[-]
Posts: 43 (04/17/08 7:58 AM) Reply Quote More Recent Posts Message Connection Block Invite	Again what is true in the States is not how it works up here. A variable rate mortgage is exactly like a fixed, with the same terms offered. The only difference is you get a lower interest rate and there is the possibility of it going up. Again this happens slowly and not overnight, and you can lock in at any time. Don't let the Americans confuse you Speedy. Talk to a mortgage broker or your personal banker they should clear it all up for you. oh, and ps the day real estate values go down significantly in the GTA I am will start snatching it up! (ya like that will happen) The only thing I have seen kill the value of property around here are ungodly condo fees (usually caused by some special assessment not covered by the reserve fund). Other than that in my market the values are soaring.
speedyforme		#75	[-]
Posts: 7250 (04/17/08 8:07 AM) Registered user Reply Quote More Recent Posts Message Connection Block Invite	^ thanks, I can never tell if they are American'ts or not... Yes I understad the variable rate, the payments = same the only difference is how much of the principle gets paid off vs interest, seems like everyone I know has a variable as far as value going down, chances are they won't as far as I know, the worst is that it never appreciates and I am VERY anti-condo, those fees scare me...
RoMa		#76	[-]
Posts: 35620 (06/04/08 6:42 AM) Reply Quote More Recent Posts Message Connection Block Invite	bump

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