[godwin]

The matter is do we know their balance sheet, income, life/ investment experience? no. There are a multitude of ways I can think of it can be a win.. maybe each individual had invested in high yield stocks?.. The last few months everyone who had invested any ETF would have gain at least 10-15% (Finally the US stock market is gaining quicker than housing in Canada) or maybe they have got another apartment as a mortgage helper? or the smart one (if any) is using the dumb ones, so if they crack early the smart ones go in for a steal? If I remember correctly Vancity's Mixer mortgage I think is tailored for such co ownership.. heck they even include life insurance for each mortgage holder just in case. I get it, you think people by any property in Canada is stupid because they are not like you, but there are so much of the story we don't know, it is hard to make a concrete judgement.

AS for the 5%.. 5% mortgages is not available from CMHC anymore, but they are available by others.. only 2/3 of all Canadian mortgages are handled via CMHC anyways. If you use a mortgage broker chances are they would recommended a non CMHC one because they offer a bit better rate vs equivalent CMHC.

There are just way too much unknown for us to tell how the story will end, other than "Four 30 somethings chip in to for 5% down payment for a 800k house".

Originally Posted by 4444

wait, what, you dated one of them... so she's only in a relationship with this dude for a year or less, and is buying a house with him, and two other friends...

i just don't understand the thinking.

and to godwin, i'm not quite sure if i'm reading what you wrote correctly, but the risk here is that one of them falls our, has kids, wants/needs to move away, turns into a drug user/dealer, defaults (they're all liable for the whole mortgage, by the way), and then decides to move, sell, or whatever... as for there being a line of ppl to take over, for the whole house perhaps (though it will be now two separate homes in one, but that seems to appeal to some), but for half a house, i'm not so sure, it's not a true duplex... also, this could happen with RE prices 10% lower, so they've now lost, after realtor fees/mortgage release fees, and others, about $25K each.

now, if these people put 20%+ down, i'd get it, they've made a bit more of a sane decision based on wanting more land, a bigger place, etc. but the fact that they only put 5% down is just mind blowing. 4 ppl, $40K total... if 1 person doesn't have $100K as a downpayment in vancouver, i just don't think it's a wise choice to buy (partially bc of diversification, though).

i don't mind admitting that i will feel little empathy for those with negative equity if and when things turn sour. home ownership is a privilege, not a right. leverage is a double edge sword, but most people see leverage as a financially smart thing to use.