GTA's Getting Old...Time to Settle Down In Calgary

GTA Poker

I really love Calgary and my job and am going to buy a house. Likely a newly built inner city home (an infill for those familiar with the AB lingo). Other than liking the place and the location is there anything I should watch out for?

PS -- finished basement = possible home games/non-raked event satellites in the future if we can get enough Calgary peeps with interest.

BlondeFish

GTA Poker;359397 wroteis there anything I should watch out for?

Yes, watch out for your future wife with whom you can settle down and grow old together with in your future home. ;)

GTA Poker

that's not really the plan:) right now

Tonychanman

Possible road trip?

moose

Dump your down payment into an RRSP now to take advantage of Home Buyers Plan.

Must be there 90 days before purchase closes.

Home Buyers' Plan (HBP)

Don't buy mortgage insurance (scam).

GTA Poker

moose;359407 wroteDump your down payment into an RRSP now to take advantage of Home Buyers Plan.

Must be there 90 days before purchase closes.

Home Buyers' Plan (HBP)

Don't buy mortgage insurance (scam).

I already have money in my RRSP for that

GTA Poker

Tonychanman;359406 wrotePossible road trip?

Which way? I'm tired of traveling right now;) I may be interested in a custom table sometime in the distant future if the possibility of a home game/satellites to events materializes.

JimmyHo

Find a place that is easy to rent out as you tend to get bored pretty quick living in the same place based on recent history. A good agent is worth his/her weight in gold. 20% down payment is good to avoid the CMHC mortgage insurance, even if you have to borrow on your line of credit to get to 20%.

What kind of mortgage rate are you looking at?

Tonychanman

GTA Poker;359410 wroteWhich way?

Me to Calgary. I'm always up for a nice relaxed home game.

BlondeFish

>> 20% up to 100% down payment is much better. There are too many Canadians greedily borrowing way too much then the inevitable "black swans" will put them in financial crisis.

A variable mortgage rate is better if you keep an eye on rising interest rates. When the variable rate inches up, just play poker moar!

pokerJAH;359422 wrote20% down payment is good to avoid the CMHC mortgage insurance, even if you have to borrow on your line of credit to get to 20%.

GTA Poker

BlondeFish;359432 wrote>> 20% up to 100% down payment is much better. There are too many Canadians greedily borrowing way too much then the inevitable "black swans" will put them in financial crisis.

A variable mortgage rate is better if you keep an eye on rising interest rates. When the variable rate inches up, just play poker moar!

I was probably going to get a 10yr fixed...I doubt the current rates will stay this low for more than 3-4 years at best?

GTA Poker

pokerJAH;359422 wroteFind a place that is easy to rent out as you tend to get bored pretty quick living in the same place based on recent history. A good agent is worth his/her weight in gold. 20% down payment is good to avoid the CMHC mortgage insurance, even if you have to borrow on your line of credit to get to 20%.

What kind of mortgage rate are you looking at?

You can rent everything out in Calgary...vacancy is currently <1%. But, I wouldn't be buying and would not have moved back to Canada if I wasn't ready to stay put long term.

moose

That's what I thought 10 years ago. My 10 yr mortgage cost me huge. In hindsight, I would stick with 1 yr at the cheapest rate you can find.

BlondeFish

Wouldn't variable rate have been even better? If one binks a WPT/WSOP/FPC tournament or other windfall, then the mortgage gets paid off early like we did but without penalty. :cool2:

moose;359445 wroteThat's what I thought 10 years ago. My 10 yr mortgage cost me huge. In hindsight, I would stick with 1 yr at the cheapest rate you can find.

GTA Poker

moose;359445 wroteThat's what I thought 10 years ago. My 10 yr mortgage cost me huge. In hindsight, I would stick with 1 yr at the cheapest rate you can find.

what was your fixed rate 10yr ago? I can't see rates going anywhere but up over 10 years with the current state of the housing market and economy, but I'm not a financial expert

Tonychanman

From a quick google search, variable 5 year rate's at 2.4% (prime -.60)vs 10 year fixed at 4.09%.

I did a 5 year fixed for the peace of mind of not needing to worry about rates all the time, but found anything beyond 5 years and the rates went disproportionately high... I would have preferred to go with 5 year var, but my wife would have driven me insane as she tends to worry her little head off.

Around 4% locked in for 10 years is not bad though, I don't see the rates staying so low for a whole lot longer.

Milo

Buy on the high ground . . .

kwsteve

GTA Poker;359461 wrote I can't see rates going anywhere but up over 10 years with the current state of the housing market and economy, but I'm not a financial expert

Pretty safe bet they can't go "anywhere but up" seeing as they're at historical lows. Question is how much and how fast they will rise. I just renewed at a 5 year variable closed for 2.7%. They guy said he feels they will stay low for at least the term of the mortgage, and that I can always lock in if they go up quickly.

So, I think they will rise slowly. I would be surprised if prime hit 5% within the next 5 years.

Low interest rate party may be ending | Toronto Star

T8urmoney

born and raised in YYC.....if you have questions on where to buy in the city (ie. where hookers and blow aren't down the street)

JimmyHo

the other thing to consider with a ten year mortgage is that the mortgage penalty would be huge if you ever have to sell the property or downsize to something smaller. The mortgage penalty decreases as the remaining term decreases so it would be a lot more likely you would be hit with this at some point, if you ever sell (not unless you upsize one day).

You always have the option of chopping up your mortgage into different components with a portion of the mortgage variable and a portion fixed. You can also have different maturity terms if you wish. If you like the 10 year rate, you could always lock in and then pre-pay the maximum (usually up to 15% per year) and turn this 15% into a variable mortgage for any term you like. That way you effectively reduce the overall mortgage rate by reducing the higher fixed rate, and converting it into a variable mortgage with a lower rate. So if you can get a 10 year fixed for 4%, and a five year variable for 2.7%, you basically convert 15% of the 4% mortgage to a 2.7% variable, reducing the overall rate. What I sometimes do is make the variable short-term (1 year) so you get the best rate possible, and then after the year you revaluate and can always convert the 15% variable mortgage into a fixed mortgage if you like the fixed rate better after the one year. There are many different things you can do to keep the overall mortgage rate lower.

I have two properties and four mortgages in total. Each property has a variable and fixed mortgage. I would suggest looking at the Scotia Total Equity Plan as it allows you a lot of flexibility and as you pay down the mortgages, your line of credit increases, which often comes in handy.