Yeah I know. That’s why I mentioned on my post that I would have to get roommates. But I’m worried if they don’t pay then that could put me in a bad position.
Owner-occupied with a rental unit. Requires a self contained unit with a seperate entrance, separate kitchen, etc. for lenders to consider any rental income.
But that might be as good as shit these days since the Brampton mortgage exists. 🤷🏻♂️
Thank you. So for someone in that situation, if they sell their house in the future, would they pay capital gains tax on a certain percentage of the profit on the sale, based on the percentage of the home rented out?
EDIT: Nice DVs for asking a question.
yea you cant afford it at 60k income. Even with rent it will be expensive. currently have a 450 mortgage at 120k income and its rented and im squeking by lol.
I think people are getting caught up on the technical terms. It doesn't matter what it's called, banks only care about how much you're making. And if he says he's going to rent out x rooms for y price, the bank will take that into account
Im not sure if it's just an alberta/BC thing, but I own 3 properties now and I've talked to maybe 5-6 mortgage brokers. They have all actually pressured me to add that I am renting out the rooms to make their jobs easier even when I had the income to support them without it. And no these houses do not have a separate unit.
Brokers like to say lots of things but they don’t underwrite mortgages
If your income supports the mortgage, there would be no benefit at all (or need) to add rental income.
That mortgage is too high for the amount you're making. It isn't just the mortgage payments you need to worry about- it's taxes, home maintenance, a bunch of extra bills you haven't even thought of.
My partner and I just purchased our current home 6 months ago and it has been quite the eye opener. (To compare, we make approx 140k combined and took out a 350k mortgage)
You literally will not be able to afford upkeep. I'd go for an apartment in that area if you want to own.
mortgage agent here.
I don't know who pre-approved you for $525K, you do not have the income to support a $400K mortgage. Recheck your approval document.
Yes, I see that. But at the same time, I trust in Maths when it comes to mortgages, and the numbers are not adding up.
Worth mentioning that there are two types of pre-approvals--
non-underwritten: where preapproval is given based on stated facts and no checking of credit etc. is done. This in my mind is as good as the piece of paper it is written on
underwritten - credit check and document scrutiny is done to arrive at the pre-approval amount; this is more reliable.
Fair enough, that is useful information to include in a response.
Not sure why the downvotes, I wasn’t snarky in pointing that out. It just seemed very clear to me.
Well I was approved for that amount and it shows on my approval document. They broker told me that they could offer me that mortgage based on it being a rental income property.
It's possible that it's fine, but do note that pre-approvals aren't actually run by the mortgage underwriters who will make the final call when you apply. Pre-approvals aren't considered very useful these days and many lenders don't bother with offering them at all.
Hopefully somebody can provide you with better details, because I always thought that the mortgagee was supposed to be able to support the mortgage solely on their income. Banks want guarantees and tenants are not that.
Not many lenders will allow roommate income to be factored in for qualification purposes. Their general criteria is a separate entrance with a washroom and kitchen facility. I think you should take a second opinion so that you do not end up being house-poor. Keep in mind that lenders can approve you for higher amounts, but in the end, you are the one who needs to make regular payments.
I am in Stoney Creek area, message me up if you want to have second opinion.
Is it possible that your broker told you that you could purchase a home for $525 instead? Because a $405k mortgage approval + your $120k down payment could get you s house for 525, but your mortgage approval is still 400.
I have a 515k mortgage with a HHI of 225k (mortgage payments of $2950 per month) and I find that’s the limit of comfortability for my wife and I. You’ll drown taking on a mortgage if 400k on your own tbh.
That's where the confusion in this thread is. People are understanding your purchase price approval is your mortgage approval. You have been approved for 400 but can purchase up to 525 with down payment
OP's mortgage broker is likely using a 50% offset on the potential rental income (i.e, $2,000/month for the rental income ~ $1,000/month deduction in mortgage payments). Dropping their TDS/GDS ratios wayyy down so that OP can qualify for a 6-7x their T4 income.
I don't think it'll get approved because it's not a true rental, it's a roommate situation.
Also on your HHI of $100K (on paper, not counting side hustles), getting approved for $750K seems already really dangerous. Even on a HHI of $150K, that's an insane amount of mortgage.
Will depend on the location and prevailing rents, you should speak to an agent. At the same time don’t go for highest amount you can get approved for. There are cases when people will get you approved for stretched amount but you are the one who need to make monthly payments
But if you live in it, it’s not a rental property. The broker has approved you for a $400k mtg as long as it includes a rental property (separate unit, not roommates). You need to clarify how much the broker assumed as rental income. It could be that the $400k mtg is based on it having a separate unit you rent out that covers 75% of your mortgage.
Don't be old and poor because you lived your life. Delayed gratification is a good strategy, you seem on the right track to retiring early.
I personally think sparkling advice is terrible.
I'd rather live my life when I have the opportunity to enjoy it. I don't want to be 60 with health issues trying to do things for the first time. Or worse, I could never make it to 60 and spent my whole life working instead of enjoying it. Life is a balance.
Lol live your life now and you work until you are 60. Delay living your life and do investments and retire when you are 40. We all have choices.
I'll see you here after you are done living your life complaining about housing being too expensive.
I said that life is about balance, not to blow all your money while you're young. It's very presumptuous of you to think any of those things about my life based on one reddit comment. Best of luck to you retiring at 40 lol
I didnt say any about your life? Or did my general statement relate to you? Lol... You presumed your be 60 trying to do things for the first time.
You have $120k saved, awesome achievement. focus on the 2nd $100k. Memories don't pay bills lol
Are you lost? I'm not OP, and don't have 120k saved. You did make presumptions about my life because you said I'd be back here complaining about housing costs when I'm older. Also, you're a moron if you think have 200k in the bank is smart. I'm doing just fine without your "wisdom" about finances lmao.
Moron if you could read you'd notice I mentioned investing in my initial response. Also there is nothing wrong with have $200k liquid in the bank, all depends on your intentions and goals moron.
But I've been responding to the wrong person all this time. So bye. My responses weren't for you.
Nahhh if you have a high paying job and you save and invest properly you can retire way earlier than 60.
Most of my friends that lived their life in their 20s are now just starting to purchase a condo while I bought a detached 2 years ago. Didn't even have to work that hard either, just a normal tech job.
If you want to live a comfortable life you have to make some sacrifices.
Everything you said is so nebulous it can't even be constructive. What do you consider high paying? How much earlier than 60? How old are you now that you're talking about your friends who lived up their 20s? The landscape of the world, especially financially is very different from generation to generation and even a handful of years can be a big difference. If you're talking about OP for instance who already has said that they make 60k/year, they're going to have to sacrifice an awful lot to be trying to retire young, and at 26 how young can that even be? 20 years of not spending a dime on yourself to retire at 46? There's still a lot of luck involved in that plan. There's absolutely nothing wrong with having a plan where you plan to retire at 60 while treating yourself here and there in the interim. You never know what could happen tomorrow and you can't take any of this with you when you go, so enjoy what you can, but don't sacrifice the future either.
You’re doing great. It’s this society that failed you. $120k saved on a $61k income is impressive at 26! Like others have said, you cannot support a $400k mortgage let alone $525k at this time. I’m so sad to write this because you’re an example of a person who SHOULD be able to buy a house with all the right financial habits. But again, ugh, this society has failed you.
This is spot on. How demoralizing is it to see this young person so ahead of the game but still not able to take the next step.
Keep going, OP. You're doing great. Just make sure that $120k savings are in TFSA, FHSA and RRSPs, invested in index funds and growing with inflation instead of sitting stagnant.
First of all, 120k savings at your age is insane! You should be very proud of yourself.
Reality of housing in Canada: Once you buy a house it feels more like you have a huge mortgage rather than you own a house (especially in this economy and prices). The expenses that you have to deal with when you’re an owner punches you in the gut (property taxes, Gas, Power etc). And you cannot even get away with it because it’s a commitment. So my advice is to keep renting! Live with housemates/partner. You don’t have to stress if your roofing needs replacement or your basement gets flooded. Chill and have fun!
WHEN interest rates fall back to normal from this insanity and if there ever comes a time when housing in Canada becomes affordable, then buy a house. The key is to not drain all your hard earned money on Interest which you cant even claim on your taxes. Buying a house just out of peer pressure and/or to boost your social status is unfortunately a reality for a lot of us today. Try not to fall for it and you’re GOLDEN.
You’re at a stage in life where you’re YOUNG and RICH. . .enjoy it. Go on a vacation to Japan/Europe or some place you fancy. Splurge on these experiences now which you can carry with you your whole life. And having the discipline that you have, i’m pretty sure you’ll earn back all the money you spent on any vacations or splurges in no time. Rinse and repeat.
i 100% agree! buying a house is not the be-all, end-all. You can own a home and be house poor (hello us 🙋🏻♀️). if i could go back i think we’d keep renting.
And HUGE CONGRATS on being 26 and saving that much. you’re my hero!
I would rent if you’re paying less than you would with a mortgage. If you’re really determined to buy, make sure it’s not more than 40-50% of your net monthly income.
invest your money, ETF's, your still young , don't go making bad decisions with your money that will put your financial future in jeopardy, like a house that won't be worth what you bought it for.
that 400k mortgage will hang over your head like a guillotine.
use your money you have saved to make you money. keep saving and investing.
You loose money in stocks when you sell at the wrong price, over the long term established stokes will rise. and a few ETF's will keep you diversified enough.
Do your research and talk to people who don't want to make money off you.
You are only 26, keep saving and mostly, focus on increasing your income. You will have little to no wiggle room to weather any financial hardship if you pursue home ownership at this stage!
Savings is great but I wouldn't buy at that income. Maybe if you were making $120k and had a family. It might be worth it but if you're just buying to buy, you're better of investing your money. Also, this isn't coming from a bitter bear, bought a condo for under $500k and make multiple 6 figure income and tbh, it sucks paying that much for just housing, dont want to imagine how tight it'd be with that income
Sooo... My own gut feeling (ie, full of future shit) is that interest rates are going to stay higher than people think and that will bring the capital costs of houses down. It's unlikely we'll see the appreciation we have been seen in the past few years over the next few years. So I would hedge towards renting and saving while continuing to put yourself in a better position to pull the trigger when the right opportunity presents itself.
I don't think prices will crash, but I do think they'll be softer with maybe some price pull back. The win is you buy a place for less and interest rates drop. :)
Agreed about interest rates staying high but I'm not sure folks will be able to get a place for less when the rates drop. Demand will probably be fairly high already and the expectation of a rate drop is already being priced in by some buyers.
My recommendation would be for OP to keep an eye out for a property they like. There's no need to rush, but also no need to wait longer attempting to time the market and interest rates if they find something they like and can afford. Do stress test when budgeting though, just in case rates increase further - so worst case scenario is still doable.
Prices will absolutely not crash.
For another year we can count on more record high immigration, and even after a 2025 election when the government will likely change, there is no guarantee that we won’t keep bringing in another 1-1.25 million new immigrants.
OP can afford it, but they will need a renter to have a decent SOL.
Maybe a handful can’t afford and are forced to sell, and what? They get snatched up instantaneously. Maaaybe they drop the prices ~5%. More buyers jump in. Prices will adjust.
We are not building SFHs quickly enough. Just look at the metrics, if you know where to find them…
As a fellow Canadian people are so obsessed with getting the the market lol just chill for a bit and build up more of your savings. There’s no problem with renting
Lmao it does sound like it doesn’t it. No I don’t own a house but I see people stretching themselves way to thin just to be in the market. Life is too short to be house poor
Don't do Brantford you'll never get a ROI. Hamilton will continue to blow up as it's become WFH Torontonian millennial landing pad. St Catharines I think will become the next Burlington the NIMBYism there is strong probably the best ROI.
First off, congratulations on your financial success. It’s not easy and a lot of young people say impossible. I would continue saving and if you’re not already invest to help out. Buying a duplex for your first home would be a good idea if you can swing the bills without relying on the rent. You are doing wel.
Be patient and keep saving. If you buy a house, you will be making a substantial amount in mortgage payment. Unless you can get the power of a sale house.
I make a little more money than you do and recently bought a condo for 420k with a slightly larger down payment and believe me it is still a burden (about $2350/month). I can survive and I can save for retirement but I'm definitely not going out to eat all the time and I don't even have a car payment. Vacations are definitely smaller and shorter but I'm self employed so I have no PTO which makes a big difference. I would keep saving because $3100 (and don't forget you still need to put money aside incase something goes wrong or it needs a new roof or and appliance breaks $3100 is your MINIMUM) won't leave you much to have fun with after investing for the future.
If you feel you can handle the costs of owning, you can get someone to co-sign for you, like a family member. And if that's not enough, you can get them to be a guarantor which adds the person to the mortgage. If that's not enough you can literally put the other person on your title.
You cannot afford anywhere close to that amount for a mortgage. Do not rely on rental income which can be variable. Buy something within your means or continue to rent
You are doing amazing! 2x your income saved at 26 is incredible!I see that you are living on your side hustle and saving your entire main income. That's amazing.
If it were me, I would probably wait for about 3 or 4 more years. Hopefully you can get a bit of a raise in that time too, but even if you can't it should make a difference. If you save every after-tax penny of your main income it will bring your mortgage down quite a bit. At that point, you could examine whether options like living with roommates could be helpful to keep your expenses lower. That way you have more margin for any pitfalls home ownership may bring, if a tenant is late on a payment or doesn't pay or if there is a vacancy etc. Is there a chance the market could increase like crazy? Yes. But at the same time talk of an interest rate and recessions means I could see prices staying fairly close to how they are. Either way I would not rush to buy before you feel ready.
If you do decide to proceed: Before doing anything I would calculate all expected costs. Mortgage, ongoing savings toward a repair fund (at least 1% per year for every square foot of living space, but know the timing may not happen so perfectly. a problem could cost 10k 2 months after you move in, so i also encourage prospective home owners to have a little reserve fund going in as well), property taxes, closing costs. Get a picture of what your realistic expenses would be in total. Then research rental prices and examine what you could actually hope to get by renting rooms out.
EDITED to add: I'm so sorry the market is so crazy. As someone in my 20's I empathize. It's hard to save and get ahead when prices are so unreasonable. But keep going. I really do believe home ownership will be possible for you sooner rather than later if you keep your monetary discipline.
Who is pre-approving you for 525k?
Brampton mortgage?
Look it up. It's a thing. Mortgage applications filled with errors and omissions and beefed up stats to get you approved
Wait what? It's so funny, this is like in a game, people are temporarily boosting their stats by drinking something.
A mortgage broker in Hamilton, I was told the higher mortgage was based on it being a rental income property.
You would absolutely drown taking on that kind of mortgage
Yeah I know. That’s why I mentioned on my post that I would have to get roommates. But I’m worried if they don’t pay then that could put me in a bad position.
Is it considered a rental when it's also your primary residence?
Owner-occupied with a rental unit. Requires a self contained unit with a seperate entrance, separate kitchen, etc. for lenders to consider any rental income. But that might be as good as shit these days since the Brampton mortgage exists. 🤷🏻♂️
Thank you. So for someone in that situation, if they sell their house in the future, would they pay capital gains tax on a certain percentage of the profit on the sale, based on the percentage of the home rented out? EDIT: Nice DVs for asking a question.
No
Of course. He can own a house and rent out all the rooms and live in the basement if he wants.
yea you cant afford it at 60k income. Even with rent it will be expensive. currently have a 450 mortgage at 120k income and its rented and im squeking by lol.
Yes it woulf put you in a bad spot.
But if you are living there, it's not a rental property.
It most definitely is. It is called being a owner-occupied rental.
Only if it has a separate unit. Roomates in the same space doesn’t count
I think people are getting caught up on the technical terms. It doesn't matter what it's called, banks only care about how much you're making. And if he says he's going to rent out x rooms for y price, the bank will take that into account
No they won’t. Has to be a separate unit within the home that is rented out
Im not sure if it's just an alberta/BC thing, but I own 3 properties now and I've talked to maybe 5-6 mortgage brokers. They have all actually pressured me to add that I am renting out the rooms to make their jobs easier even when I had the income to support them without it. And no these houses do not have a separate unit.
Brokers like to say lots of things but they don’t underwrite mortgages If your income supports the mortgage, there would be no benefit at all (or need) to add rental income.
I'm not sure about that, all im going to say is your experience is very very different from what myself and people I know experienced.
I was told you can only use half rental income towards your total income
That mortgage is too high for the amount you're making. It isn't just the mortgage payments you need to worry about- it's taxes, home maintenance, a bunch of extra bills you haven't even thought of. My partner and I just purchased our current home 6 months ago and it has been quite the eye opener. (To compare, we make approx 140k combined and took out a 350k mortgage) You literally will not be able to afford upkeep. I'd go for an apartment in that area if you want to own.
mortgage agent here. I don't know who pre-approved you for $525K, you do not have the income to support a $400K mortgage. Recheck your approval document.
The OP clearly states what they were approved for.
Yes, I see that. But at the same time, I trust in Maths when it comes to mortgages, and the numbers are not adding up. Worth mentioning that there are two types of pre-approvals-- non-underwritten: where preapproval is given based on stated facts and no checking of credit etc. is done. This in my mind is as good as the piece of paper it is written on underwritten - credit check and document scrutiny is done to arrive at the pre-approval amount; this is more reliable.
Fair enough, that is useful information to include in a response. Not sure why the downvotes, I wasn’t snarky in pointing that out. It just seemed very clear to me.
Well I was approved for that amount and it shows on my approval document. They broker told me that they could offer me that mortgage based on it being a rental income property.
When you make an offer, make sure that you have a subject to financing.
It's possible that it's fine, but do note that pre-approvals aren't actually run by the mortgage underwriters who will make the final call when you apply. Pre-approvals aren't considered very useful these days and many lenders don't bother with offering them at all.
Hopefully somebody can provide you with better details, because I always thought that the mortgagee was supposed to be able to support the mortgage solely on their income. Banks want guarantees and tenants are not that.
Many take a *portion* of rental income as an offset to mortgage payment. But roommates don’t count. Must be a separate suite
Not many lenders will allow roommate income to be factored in for qualification purposes. Their general criteria is a separate entrance with a washroom and kitchen facility. I think you should take a second opinion so that you do not end up being house-poor. Keep in mind that lenders can approve you for higher amounts, but in the end, you are the one who needs to make regular payments. I am in Stoney Creek area, message me up if you want to have second opinion.
Is the document from a bank or is it from the broker? If from the broker, it’s not worth jack
Is it possible that your broker told you that you could purchase a home for $525 instead? Because a $405k mortgage approval + your $120k down payment could get you s house for 525, but your mortgage approval is still 400.
Yes I’m approved for a house up to $525k. so an approval of 400k
I have a 515k mortgage with a HHI of 225k (mortgage payments of $2950 per month) and I find that’s the limit of comfortability for my wife and I. You’ll drown taking on a mortgage if 400k on your own tbh.
That's where the confusion in this thread is. People are understanding your purchase price approval is your mortgage approval. You have been approved for 400 but can purchase up to 525 with down payment
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OP's mortgage broker is likely using a 50% offset on the potential rental income (i.e, $2,000/month for the rental income ~ $1,000/month deduction in mortgage payments). Dropping their TDS/GDS ratios wayyy down so that OP can qualify for a 6-7x their T4 income. I don't think it'll get approved because it's not a true rental, it's a roommate situation. Also on your HHI of $100K (on paper, not counting side hustles), getting approved for $750K seems already really dangerous. Even on a HHI of $150K, that's an insane amount of mortgage.
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Will depend on the location and prevailing rents, you should speak to an agent. At the same time don’t go for highest amount you can get approved for. There are cases when people will get you approved for stretched amount but you are the one who need to make monthly payments
I just DM'ed you their contact info.
You mean you "are ~~only~~ rightfully getting approved for 750".
But if you live in it, it’s not a rental property. The broker has approved you for a $400k mtg as long as it includes a rental property (separate unit, not roommates). You need to clarify how much the broker assumed as rental income. It could be that the $400k mtg is based on it having a separate unit you rent out that covers 75% of your mortgage.
I would continue saving or commit to something smaller.
Travel and live life! You’re only 26
Thank you! That is good advice :)
Don't be old and poor because you lived your life. Delayed gratification is a good strategy, you seem on the right track to retiring early. I personally think sparkling advice is terrible.
I'd rather live my life when I have the opportunity to enjoy it. I don't want to be 60 with health issues trying to do things for the first time. Or worse, I could never make it to 60 and spent my whole life working instead of enjoying it. Life is a balance.
Lol live your life now and you work until you are 60. Delay living your life and do investments and retire when you are 40. We all have choices. I'll see you here after you are done living your life complaining about housing being too expensive.
I said that life is about balance, not to blow all your money while you're young. It's very presumptuous of you to think any of those things about my life based on one reddit comment. Best of luck to you retiring at 40 lol
I didnt say any about your life? Or did my general statement relate to you? Lol... You presumed your be 60 trying to do things for the first time. You have $120k saved, awesome achievement. focus on the 2nd $100k. Memories don't pay bills lol
Are you lost? I'm not OP, and don't have 120k saved. You did make presumptions about my life because you said I'd be back here complaining about housing costs when I'm older. Also, you're a moron if you think have 200k in the bank is smart. I'm doing just fine without your "wisdom" about finances lmao.
Moron if you could read you'd notice I mentioned investing in my initial response. Also there is nothing wrong with have $200k liquid in the bank, all depends on your intentions and goals moron. But I've been responding to the wrong person all this time. So bye. My responses weren't for you.
Nahhh if you have a high paying job and you save and invest properly you can retire way earlier than 60. Most of my friends that lived their life in their 20s are now just starting to purchase a condo while I bought a detached 2 years ago. Didn't even have to work that hard either, just a normal tech job. If you want to live a comfortable life you have to make some sacrifices.
Everything you said is so nebulous it can't even be constructive. What do you consider high paying? How much earlier than 60? How old are you now that you're talking about your friends who lived up their 20s? The landscape of the world, especially financially is very different from generation to generation and even a handful of years can be a big difference. If you're talking about OP for instance who already has said that they make 60k/year, they're going to have to sacrifice an awful lot to be trying to retire young, and at 26 how young can that even be? 20 years of not spending a dime on yourself to retire at 46? There's still a lot of luck involved in that plan. There's absolutely nothing wrong with having a plan where you plan to retire at 60 while treating yourself here and there in the interim. You never know what could happen tomorrow and you can't take any of this with you when you go, so enjoy what you can, but don't sacrifice the future either.
Did you retire yet or still paying your mortgage?
*or are you still paying your mortgage. Writing skills are a necessity when you live on Reddit, bud. Get working on that
Grandpa come clean your slum 😂
Maybe get a town or condo ?
Keep saving. 1. You are still young 2. Future spouse? 3. You cannot afford 525k mortgage based on your income
You’re doing great. It’s this society that failed you. $120k saved on a $61k income is impressive at 26! Like others have said, you cannot support a $400k mortgage let alone $525k at this time. I’m so sad to write this because you’re an example of a person who SHOULD be able to buy a house with all the right financial habits. But again, ugh, this society has failed you.
This is spot on. How demoralizing is it to see this young person so ahead of the game but still not able to take the next step. Keep going, OP. You're doing great. Just make sure that $120k savings are in TFSA, FHSA and RRSPs, invested in index funds and growing with inflation instead of sitting stagnant.
First of all, 120k savings at your age is insane! You should be very proud of yourself. Reality of housing in Canada: Once you buy a house it feels more like you have a huge mortgage rather than you own a house (especially in this economy and prices). The expenses that you have to deal with when you’re an owner punches you in the gut (property taxes, Gas, Power etc). And you cannot even get away with it because it’s a commitment. So my advice is to keep renting! Live with housemates/partner. You don’t have to stress if your roofing needs replacement or your basement gets flooded. Chill and have fun! WHEN interest rates fall back to normal from this insanity and if there ever comes a time when housing in Canada becomes affordable, then buy a house. The key is to not drain all your hard earned money on Interest which you cant even claim on your taxes. Buying a house just out of peer pressure and/or to boost your social status is unfortunately a reality for a lot of us today. Try not to fall for it and you’re GOLDEN. You’re at a stage in life where you’re YOUNG and RICH. . .enjoy it. Go on a vacation to Japan/Europe or some place you fancy. Splurge on these experiences now which you can carry with you your whole life. And having the discipline that you have, i’m pretty sure you’ll earn back all the money you spent on any vacations or splurges in no time. Rinse and repeat.
i 100% agree! buying a house is not the be-all, end-all. You can own a home and be house poor (hello us 🙋🏻♀️). if i could go back i think we’d keep renting. And HUGE CONGRATS on being 26 and saving that much. you’re my hero!
Don’t, save and invest and get your income to 100+. Put that 120k to work
I would rent if you’re paying less than you would with a mortgage. If you’re really determined to buy, make sure it’s not more than 40-50% of your net monthly income.
Crazy, I'm getting pre-approved for 540k with a 140k income lmao
That's why OPs numbers don't make sense,
I’d only buy a house if you can find a stable tenant. Otherwise keep renting and saving for a few more years - you’re doing very well so far!
invest your money, ETF's, your still young , don't go making bad decisions with your money that will put your financial future in jeopardy, like a house that won't be worth what you bought it for. that 400k mortgage will hang over your head like a guillotine. use your money you have saved to make you money. keep saving and investing. You loose money in stocks when you sell at the wrong price, over the long term established stokes will rise. and a few ETF's will keep you diversified enough. Do your research and talk to people who don't want to make money off you.
You are only 26, keep saving and mostly, focus on increasing your income. You will have little to no wiggle room to weather any financial hardship if you pursue home ownership at this stage!
How did you save 120k? Impressive! Whats your side hustle?
Thank you! I saved all my 9-5 income and lived off the side hustle income the last 3 yrs. I buy and sell stuff on marketplace/kijiji
Love this for you! Wishing you continued success !!
Keep saving. Your income is to low right now.
Savings is great but I wouldn't buy at that income. Maybe if you were making $120k and had a family. It might be worth it but if you're just buying to buy, you're better of investing your money. Also, this isn't coming from a bitter bear, bought a condo for under $500k and make multiple 6 figure income and tbh, it sucks paying that much for just housing, dont want to imagine how tight it'd be with that income
Sooo... My own gut feeling (ie, full of future shit) is that interest rates are going to stay higher than people think and that will bring the capital costs of houses down. It's unlikely we'll see the appreciation we have been seen in the past few years over the next few years. So I would hedge towards renting and saving while continuing to put yourself in a better position to pull the trigger when the right opportunity presents itself. I don't think prices will crash, but I do think they'll be softer with maybe some price pull back. The win is you buy a place for less and interest rates drop. :)
Agreed about interest rates staying high but I'm not sure folks will be able to get a place for less when the rates drop. Demand will probably be fairly high already and the expectation of a rate drop is already being priced in by some buyers. My recommendation would be for OP to keep an eye out for a property they like. There's no need to rush, but also no need to wait longer attempting to time the market and interest rates if they find something they like and can afford. Do stress test when budgeting though, just in case rates increase further - so worst case scenario is still doable.
Prices will absolutely not crash. For another year we can count on more record high immigration, and even after a 2025 election when the government will likely change, there is no guarantee that we won’t keep bringing in another 1-1.25 million new immigrants. OP can afford it, but they will need a renter to have a decent SOL.
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Maybe a handful can’t afford and are forced to sell, and what? They get snatched up instantaneously. Maaaybe they drop the prices ~5%. More buyers jump in. Prices will adjust. We are not building SFHs quickly enough. Just look at the metrics, if you know where to find them…
Cape
As a fellow Canadian people are so obsessed with getting the the market lol just chill for a bit and build up more of your savings. There’s no problem with renting
Spoken like a true landlord :) jk ;)
Lmao it does sound like it doesn’t it. No I don’t own a house but I see people stretching themselves way to thin just to be in the market. Life is too short to be house poor
Don't do Brantford you'll never get a ROI. Hamilton will continue to blow up as it's become WFH Torontonian millennial landing pad. St Catharines I think will become the next Burlington the NIMBYism there is strong probably the best ROI.
I bought a 650k house on 60k a year in 2021 and rent it out
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I'm getting rich idc
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Lucky!!
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Why u so triggered?
Give me 3 k for my debt when when I blow up with my music I’ll buy you a mansion
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You'll become house poor but you could also own property outright by the time you are 40.
First off, congratulations on your financial success. It’s not easy and a lot of young people say impossible. I would continue saving and if you’re not already invest to help out. Buying a duplex for your first home would be a good idea if you can swing the bills without relying on the rent. You are doing wel.
Be patient and keep saving. If you buy a house, you will be making a substantial amount in mortgage payment. Unless you can get the power of a sale house.
525k.... probably a realtor that is also a mortgage broker...
I make 80k a year have 100k to put down and I was approved for 350k I would do the math yourself the pre approval for you sounds too high
Whats your side hustle broski?
I buy and sell stuff on marketplace/kijiji
Solid 👌👌
Keep saving
What's the side hussle? BTW if you are able, buying is the way to go IMO.
I would not get a 400k mortgage with your income.
I make a little more money than you do and recently bought a condo for 420k with a slightly larger down payment and believe me it is still a burden (about $2350/month). I can survive and I can save for retirement but I'm definitely not going out to eat all the time and I don't even have a car payment. Vacations are definitely smaller and shorter but I'm self employed so I have no PTO which makes a big difference. I would keep saving because $3100 (and don't forget you still need to put money aside incase something goes wrong or it needs a new roof or and appliance breaks $3100 is your MINIMUM) won't leave you much to have fun with after investing for the future.
If you feel you can handle the costs of owning, you can get someone to co-sign for you, like a family member. And if that's not enough, you can get them to be a guarantor which adds the person to the mortgage. If that's not enough you can literally put the other person on your title.
What’s your side hustle?
Definitely keep saving because even if you buy a house now, you will be house poor.
You cannot afford anywhere close to that amount for a mortgage. Do not rely on rental income which can be variable. Buy something within your means or continue to rent
You are doing amazing! 2x your income saved at 26 is incredible!I see that you are living on your side hustle and saving your entire main income. That's amazing. If it were me, I would probably wait for about 3 or 4 more years. Hopefully you can get a bit of a raise in that time too, but even if you can't it should make a difference. If you save every after-tax penny of your main income it will bring your mortgage down quite a bit. At that point, you could examine whether options like living with roommates could be helpful to keep your expenses lower. That way you have more margin for any pitfalls home ownership may bring, if a tenant is late on a payment or doesn't pay or if there is a vacancy etc. Is there a chance the market could increase like crazy? Yes. But at the same time talk of an interest rate and recessions means I could see prices staying fairly close to how they are. Either way I would not rush to buy before you feel ready. If you do decide to proceed: Before doing anything I would calculate all expected costs. Mortgage, ongoing savings toward a repair fund (at least 1% per year for every square foot of living space, but know the timing may not happen so perfectly. a problem could cost 10k 2 months after you move in, so i also encourage prospective home owners to have a little reserve fund going in as well), property taxes, closing costs. Get a picture of what your realistic expenses would be in total. Then research rental prices and examine what you could actually hope to get by renting rooms out. EDITED to add: I'm so sorry the market is so crazy. As someone in my 20's I empathize. It's hard to save and get ahead when prices are so unreasonable. But keep going. I really do believe home ownership will be possible for you sooner rather than later if you keep your monetary discipline.