Quote:
Originally Posted by duc_evo_sp
I don't understand why people are buying Canadian Real Estate. The CMHC subsidizes all mortgages with a down payment less than 19.99%. And I am guessing that the majority of Canadians have a down payment less that 19.99% of the mortgage value. Which also means that their payment CMHC's premium every month.
Which means:
1. Canadian banks win if Real Estate goes up.
2. Canadian banks win if Real Estate goes down.
3. Canadian banks win if interest rates go up and you are unable to make payments on your mortgage, then you sell at a loss. And your in debt for the value on the property vs the value left on the mortgage.
4. When interest rates move higher, your real estate is real valued at that current rate and your investment might be far less valuable than it will at a lower rate." Under water mortgage."
5.When interest rates move higher, there will be a small group of qualified buyer's to buy that investment at a higher rate.
The nature of Real Estate Investing in Canada is 100% of the risk on the Buyers. 0% risk for the bank to facilitate loans to you. Its a one sided game, majority of Canada will lose but Canadian banks will always win.
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You forgot the worst part : Bankruptcy does not discharge mortgages.