Lending Stories – “A friend works for BC assessments. Nearly all buyers these days are mortgaged to the hilt… 95% loan to value.”

gse36 at RE Talks 15 Feb 2010 12:32 pm“I was speaking to a mortgage broker. He showed me his past 10 deals. Of these, 4 were mortgage renewals for >100% PP. It’s kind of crazy. Like a guy buys a downtown loft $515k in 2005. Now takes out a new mortgage at $569k.”

grantness at RE Talks 15 Feb 2010 12:39 pm“A friend works for BC assessments. He sees mortgage details all day long. Last night he told me nearly all buyers these days are mortgaged to the hilt… 95% LTV [loan to value].”

gse at RE Talks 15 Feb 2010 1:14 pm“That’s very consistent with CMHC figures of avg 6% downpayment, across Canada, since 2007.”

One response to “Lending Stories – “A friend works for BC assessments. Nearly all buyers these days are mortgaged to the hilt… 95% loan to value.”

  1. Mortgages greater than the purchase price ? What are these people thinking ?! I’ll tell you what they’re *not* thinking: of paying it off. We have entered the realm of a pure ponzi scheme, where some are spending paper gains under the assumption that further gains will follow.

    It’s one thing to sell your house and spend the windfall, but quite another to spend wealth that only exists on paper. Easy come, easy go, but the spending and debts are always real.

    A reminder to all: money that is spent must ultimately be paid back, or it is taken out of your pocket when you sell. You are liquidating your wealth by borrowing against your home.

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