What Do You Buy – a Condo or a House With a Suite?

General Toni Ceniti 31 Mar

What Do You Buy – a Condo or a House With a Suite?

What Do You Buy - a Condo or a House With a Suite?So you have worked hard and saved up a down payment of $25,000. What do you buy a condo or a house with a suite? Sometimes the decision is an easy one while for some it may not be as obvious.

If you have a specific neighborhood in mind which is high density condo living then you may elect to choose a condo. If, however, you are looking in areas where there is a mix of houses and condo units with a range of price points, then talk to your mortgage broker to compare your options.

For example if you have $25,000 you could put that money down as 10% on a $250,000 condo. Your monthly costs would include a mortgage payment of $1,120 and estimated $300 for strata and $120 for taxes for a total of $1,540.

If you take the same amount of $25,000 and put that down on a purchase of a home with a suite for $425,000 your monthly costs including a mortgage payment of $2,000 and estimated $200 per month property taxes would total $2,200. With suite income from a one bedroom at $700 per month your net cost would be $1,500 per month and you have a property worth $175,000 more for the same investment of $25,000. If you want to go up in price you could use the same $25,000 as 5% down on a home worth up to $500,000. This may get you into a better neighborhood with potential for higher suite income or better appreciation on the value. Note: Due to the price point exceeding $425,000 you would give up your first time buyers exemption on property purchase transfer tax.

You may wonder what kind of house with a suite you can buy for $425,000 – $500,000. There are homes located in the Fraser Valley in very nice communities within this price point. If you prefer the condo lifestyle then go that route. If you thought you could only afford to buy a condo instead of a house, you may want to take a closer look at the numbers. Of course it all depends on the strength of your application (your ability to debt service and your credit history).

So when you ask the question what do you buy a condo or a house with a suite? Now you can answer the question with confidence and make an informed decision.

For more information specific to your situation contact your Dominion Lending Centres mortgage professional.

Be Aware Of Allowable Sources Of Down Payments

General Toni Ceniti 18 Mar

Be Aware Of Allowable Sources Of Down Payments

Be Aware Of Allowable Sources Of Down PaymentsIn Winnipeg, MB, Jackson and Hailey have been living in a rental home for more than three years. They liked this rental home so much; they asked the landlord if they could buy this house. The landlord agreed to sell the property for $300,000 to Jackson and Hailey. On August 1, 2015, the landlord as “seller” and the tenants as “buyer” signed the agreement (Offer to Purchase). They deposited $5,000 with the agreement and the possession date was August 31, 2015. If Jackson and Hailey put 5% down, then they need $15,000 as a down payment PLUS 1.5% for the closing costs of the house – 1.5% of $300,000 would be $4,500. To buy this home, Jackson and Hailey need $15,000 + $4,500. Altogether, they need $19,500.

In the month of July 2015, the couple (the tenants – Jackson and Hailey) added a patio at the rental home and painted the whole house inside. The tenants spent $5,897.32 from their pocket for this renovation and patio project. On July 28, 2015, the landlord (the seller) gave them a cheque for $5,897.32.

They deposited this cheque in their savings account and were under the impression that they could use this $5,897.32 towards their 5% down or closing costs. No, they can’t use this amount since the landlord paid it for the work they did in that same home. Under the guidelines, the seller is not allowed to pay any money to the buyer for the sale of this property. Now Jackson and Hailey are short $5,897.32 to buy this home.

Jackson and Hailey should have gotten some advice from a mortgage professional at Dominion Lending Centres before they signed an agreement to buy this home.

The proper planning of a mortgage is pertinent before anybody signs any agreements – it helps the client and the real estate agent.

Renovating Your Home

General Toni Ceniti 1 Mar

Renovating Your Home

Renovating Your HomeDid you know you can get a mortgage for renovating your home? Many home buyers and existing home owners are deciding to get more bang for their buck by purchasing a home that needs some improvements.

Whether you are renovating at the time you buy or waiting for a few years, there are financing options available.

 

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