Vancouver's Real Estate Market

[Great68]

Originally Posted by supafamous

only allow the grant to be claimed on one of your properties

Huh? The current HOG can only be claimed on a principal residence, so essentially multiple property owners are paying higher property taxes on their additional properties.

I'd say the tax rates for additional properties should increase, but that would likely open up another can of worms, as those costs would likely be just passed on to tenants in the form of increased rents.

I'd like to see some restrictions or maybe taxation on HELOC's depending on how they're used. Something about people using equity from homes they purchased with CMHC backed mortgages, to buy secondary properties, or toys such as cars/boats rubs me the wrong way.

[supafamous]

Originally Posted by Great68

Huh? The current HOG can only be claimed on a principal residence, so essentially multiple property owners are paying higher property taxes on their additional properties.

I'd say the tax rates for additional properties should increase, but that would likely open up another can of worms, as those costs would likely be just passed on to tenants in the form of increased rents.

I'd like to see some restrictions or maybe taxation on HELOC's depending on how they're used. Something about people using equity from homes they purchased with CMHC backed mortgages, to buy secondary properties, or toys such as cars/boats rubs me the wrong way.

My bad on the HOG, should have checked my facts first.

Restrictions on HELOCs seem to be solving the wrong underlying problem and may penalize legitimate uses. Solving housing prices with "after it happens" solutions like taxes is really, really tricky - it'll penalize people who have legitimate cases or who are innocents and the ones who are abusing the system tend to be hard to get at (they'll just set up shell corps, use other people's names etc).

The Empty Home tax is kinda like this - a small number of folks have ended up being hurt by it when they have legitimate use cases for not renting out their home when it's not occupied. I'm not sure that tax is doing us any real good - small taxes that selectively punish tend to lead to resentments both of others and of gov't. Taxes that apply broadly and equitably are much healthier for society.

For what it's worth, we see these kinds of problem (rising prices) in other markets - everything from used cars to stock prices to used IKEA furniture. When supply is constrained prices go up - that's a pretty basic law of economics yet it seems like it's only in housing where the solution of "build more of the thing people want" is not the first and most important priority.

[JDMDreams]

^^ there's no equity for toys if you're on Cmhc, you are also paying a "insurance" penalty on top of your mortgage + %. So it actually hurts the poor people. But I guess it allows them to buy get their foot in rather than rent.

[donk.]

Originally Posted by JDMDreams

^^ there's no equity for toys if you're on Cmhc, you are also paying a "insurance" penalty on top of your mortgage + %. So it actually hurts the poor people. But I guess it allows them to buy get their foot in rather than rent.

If you bought a 1 mil house at 5% down 360 days ago with cmhc, and today it's 1.3mil, you could easily pull HELOC on it, buy a 500k condo with 100 down to rent out, spend another 100 on a new car

Banks love giving out loans, the more the merrier. Cmhc is just a purchase hurdle that protects the banks, incase you default. Hence the lower rate, because the bank has "nothing to lose" as it's insured

[JDMDreams]

No you can't on Cmhc is 5% of first $500, then remaining $500 is 10% down so it's $75000 down. Cmhc premium is $36999.96 so total borrowed is $962k. Let's say $3845 a month at 1.5% var rate. These numbers are from Cmhc site. This is assuming they had the money to pay for the property transfer tax and closing cost.

At $1.3m 80% Loan to value is $1.04m, after one year they will still owe $930k. So you barely have $100k to pull out that's only if your income can afford that.

[PeanutButter]

Originally Posted by donk.

If you bought a 1 mil house at 5% down 360 days ago with cmhc, and today it's 1.3mil, you could easily pull HELOC on it, buy a 500k condo with 100 down to rent out, spend another 100 on a new car

Banks love giving out loans, the more the merrier. Cmhc is just a purchase hurdle that protects the banks, incase you default. Hence the lower rate, because the bank has "nothing to lose" as it's insured

Are you saying you would do something like this?

There are not many people who could service a $1.3M Loan... You do realize that you have to service the debt you take out right?

I think people have these grand ideas on these things, but they're not very realistic.

[6thGear.]

LOL. HELOC on a 5% down insured mortgage. Sign me up for that.

[EvoFire]

Originally Posted by donk.

If you bought a 1 mil house at 5% down 360 days ago with cmhc, and today it's 1.3mil, you could easily pull HELOC on it, buy a 500k condo with 100 down to rent out, spend another 100 on a new car

Banks love giving out loans, the more the merrier. Cmhc is just a purchase hurdle that protects the banks, incase you default. Hence the lower rate, because the bank has "nothing to lose" as it's insured

You have no idea how this works do you? You can't just take money out as a loan against your property if your income doesn't support it. You have to pay a loan back.

On top of that the major banks won't do a HELOC on a 5% down purchase.

[bcedhk]

Originally Posted by donk.

If you bought a 1 mil house at 5% down 360 days ago with cmhc, and today it's 1.3mil, you could easily pull HELOC on it, buy a 500k condo with 100 down to rent out, spend another 100 on a new car

Banks love giving out loans, the more the merrier. Cmhc is just a purchase hurdle that protects the banks, incase you default. Hence the lower rate, because the bank has "nothing to lose" as it's insured

Maybe another reason why our housing market is so fuked is because of bad and inaccurate advice like this.

[JDMDreams]

^^ maybe it was like that like 15+ years ago, you have a job? here's some money give it back in 35 years. You freshi off da boat from China? You have 35% down cash money in your suitcase? Say no more, here's some money.

They closed all these loop holes.

[donk.]

I don't always look for advice, but when I do, I go to a forum

[whitev70r]

in the wise words of Yoda ...

...donk and Hondaracer's advice ... you best not listen to.

edit - donk is actually quite funny ... he already admitted that this is purely for entertainment and he just does it to get a rise in people. Once I started reading his posts in this light ... I crack up. Sorry donk for spoiling it for you.

[inv4zn]

I mean yeah, I'm sure to all the people in their 20's and 30's who can't afford to live here find it all hilarious lol

[Liquid_o2]

Wondering if you guys can provide some advice.

Our condo is up for mortgage renewal in November of this year. Coming to the point where we can break the mortgage with limited penalty.

We are hoping to find something bigger in the next year or two (if we can actually find anything in our price range of course). Should we be locking in a fixed rate for another 5 years with a clause that we can transfer the mortgage and rate over to a new property? Or should we be going variable as it provides more flexibility if we move?

I'll be talking to my mortgage broker soon, but I want to be better informed.

[hud 91gt]

Generally speaking, most mortgages your able to port it over (obviously check the fine print). I forget the time frame(3 months maybe?), but at that point you have to make sure all your ducks line up and your possession and sale date all fall within the window.

Generally speaking, variable mortgages to opt out you pay 3 months interest. Which at todays rates isn’t too much.

I went with option 2, as I’d hate to have a deal fall apart because closing dates aren’t aligning. I’d rather take the hit on 3 months interest and add it to the cost of doing business.

[Euro7r]

Originally Posted by Liquid_o2

Wondering if you guys can provide some advice.

Our condo is up for mortgage renewal in November of this year. Coming to the point where we can break the mortgage with limited penalty.

We are hoping to find something bigger in the next year or two (if we can actually find anything in our price range of course). Should we be locking in a fixed rate for another 5 years with a clause that we can transfer the mortgage and rate over to a new property? Or should we be going variable as it provides more flexibility if we move?

I'll be talking to my mortgage broker soon, but I want to be better informed.

Really depends on the bank and what flexibility they are willing to work with. I recently got a variable mortgage on my condo and I talked to HSBC, CIBC & TD. They were all 3 months penalty if breaking the mortgage; however, if I get another mortgage of the same amount or higher within a certain time period, there won't be penalty. I recall HSBC & CIBC being 3 months, TD being 12 months (which is why I went with TD).

[underscore]

Originally Posted by whitev70r

in the wise words of Yoda ...

...donk and Hondaracer's advice ... you best not listen to.

edit - donk is actually quite funny ... he already admitted that this is purely for entertainment and he just does it to get a rise in people. Once I started reading his posts in this light ... I crack up. Sorry donk for spoiling it for you.

People still troll internet forums? What year is it? I find it pretty boring and tedious to have people wasting their time just to entertain someone else but to each their own.

[SumAznGuy]

Originally Posted by Liquid_o2

Wondering if you guys can provide some advice.

Our condo is up for mortgage renewal in November of this year. Coming to the point where we can break the mortgage with limited penalty.

We are hoping to find something bigger in the next year or two (if we can actually find anything in our price range of course). Should we be locking in a fixed rate for another 5 years with a clause that we can transfer the mortgage and rate over to a new property? Or should we be going variable as it provides more flexibility if we move?

I'll be talking to my mortgage broker soon, but I want to be better informed.

I would recommend taking a serious look at your finances and talk to an expert.
Off the top of my head, you are better off with signing a shorter mortgage vs a 5 year mortgage if you plan on selling in a year or 2.
Say you do wait and move in 2 years, you'll still have 3 years left on the 5 year mortgage and the penalty will be quite high.

Sign a 1 or 2 year mortgage and you should be better off in that instance if you go with a fixed rate mortgage.

[Liquid_o2]

Thanks for the advice guys. I will consider each option and speak with my mortgage broker.

[EvoFire]

Originally Posted by Liquid_o2

Wondering if you guys can provide some advice.

Our condo is up for mortgage renewal in November of this year. Coming to the point where we can break the mortgage with limited penalty.

We are hoping to find something bigger in the next year or two (if we can actually find anything in our price range of course). Should we be locking in a fixed rate for another 5 years with a clause that we can transfer the mortgage and rate over to a new property? Or should we be going variable as it provides more flexibility if we move?

I'll be talking to my mortgage broker soon, but I want to be better informed.

If you are looking for something bigger, chances are it's going to cost you more so I'm not terribly concerned about moving mortgages. Most if not all major banks allow you to move mortgages. If you are going for a bigger mortgage, the bank can probably refinance the whole thing at a better rate anyways.

I'm with TD, fixed mortgages gives you 6 months of leeway while variable is 1 year. Fixed mortgages have a penalty if you break them, but variable doesn't. You can refinance at anytime with a variable mortgage with TD. We bought first then sold after and just bridged in between because we were concerned we would be left with nowhere to live in no man's land where the market ran away while we were still looking.

[Gerbs]

Originally Posted by inv4zn

I mean yeah, I'm sure to all the people in their 20's and 30's who can't afford to live here find it all hilarious lol

I find it pretty funny haha

[Gerbs]

Does anyone actually know the rough estimate for the income you need and estimated HELOC you would be approved for? I asked a few lenders and it seems really vague without having to put in a full application with a credit check.

What would happen in this scenario?

$500K Place, 20% Downpayment
$400K Loan, $80,000 income to qualify with no debt.

2 years later

$600K Valuation
$370K Loan, $230K in equity

What's the HELOC loan range if income increased to $120,000 vs stayed at $80,000?

[rb]

anyone have any experience with no-income verification mortgages/loans? Sounds like a horrible idea and I know you're going to be to be paying a higher rate but I'm in a weird situation.

[Hondaracer]

Originally Posted by rb

anyone have any experience with no-income verification mortgages/loans? Sounds like a horrible idea and I know you're going to be to be paying a higher rate but I'm in a weird situation.

Lol..avoid at all costs.

My sister in law is kinda this wanna-be hippy hasn’t had steady employment, maybe ever. But she’s got a bit of money. Her and another wanna-be hippy bought a place on one of the gulf islands. Wife and I were chatting about our mortgage renewal at 1.29 or whatever we got, she chimed in and said her and the friend were paying 8% because they had some down payment but no verifiable income

[JDMDreams]

On $120k assuming no debt $600 a month housing cost you should be able to do $600k HELOC. Around $365k on $80k.