0-Down Lending In Vancouver, circa June 2011

Posted on 5 July 2011 | 55 Comments

This from realtor Lesley Wagstaff’s website, archived here for the record. [hat-tip 'Patiently Waiting' at VCI]:

This entry was posted in 05. Where do Buyers get the money?, 08. Overextended Buyers, 14. Social Effects of the Boom, 15. Misallocation of Resources and tagged , , , , , , , , , , , , . Bookmark the permalink.

55 Responses to 0-Down Lending In Vancouver, circa June 2011

  1. Peter Pan | 5 July 2011 at 7:03 am | Reply

    [mild realtor slur removed. see discussion below. -ed]…

  2. Michael | 5 July 2011 at 7:52 am | Reply

    Wow, atrocious web design skills for that alone she should be made to pull that hydro tower out of the river.

    But seriously, who could be that stupid…. Oh never mind.

  3. AG Sage | 5 July 2011 at 8:03 am | Reply

    Did you forward this to CMHC?

  4. Derp Derp | 5 July 2011 at 8:24 am | Reply

    on it’s way

    [In light of discussion below, link to very mild comical graphic removed, after Derp Derp's suggestion, and due consideration. -ed.]

  5. Derp Derp | 5 July 2011 at 8:28 am | Reply

    [very mild jocular slur removed -ed.] can’t spell, either

  6. bubbly | 5 July 2011 at 1:11 pm | Reply

    I have seen many of these. “Cash back”, borrowed downpayment, teaser rates, etc. But subprime does NOT exist in Canada!

  7. vinoverde | 5 July 2011 at 2:16 pm | Reply

    Many interesting things in this ad, thanks for posting. here is one, lets see is this right: the 3.00% (approx) insurance fee, which is supposed to go towards CMHC capital to protect taxpayers from bailing out CMHC is instead rolled into the CMHC liability (the mortgage). Beautiful, in its evil simplicity and its a wash on CHMC’s accounts. Beautiful until it all ends of course.

    • Peter Pan | 5 July 2011 at 4:05 pm | Reply

      It is quite elegant in its evil simplicity… Homeowner uses borrowed money to insure an asset, not for his/her benefit, but his creditor’s asset – the Bank’s mortgage. CMHC looks brilliant for writing put options on housing until the SHTF. Then everyone is bailed out by the government.
      Amazing to think CMHC was started to help out veterans buy affordable housing…

      • Derp Derp | 5 July 2011 at 4:08 pm |

        these are war veterans, in a sense – they’ve been waging a valiant campaign against common sense and canadians for years.

  8. Peter Pan | 5 July 2011 at 8:38 pm | Reply

    I e-mailed her to say “Shame on You” for putting her buyers into a situation where they have no skin in the game at taxpayer’s risk, while she pockets her commission. I told her it’s a great scam for everyone, except taxpayers. She invited me to call her to get an “informed opinion” on the program she’s flogging…
    I should have remembered realtors are incapable of feeling shame…

  9. DM | 5 July 2011 at 9:14 pm | Reply

    And Canada’s banking system is different from the US how???? Tick tock

  10. DB | 6 July 2011 at 10:02 am | Reply

    Dear Mr. Peter Pan – this message is about Lesley Wagstaff. It is interesting to read this blog from an anonymous source trying to sully the reputation of a named individual. It contains such thoughtful comments like “Realtor scum” and “dumbass”. It takes so much intelligence to target an individual just trying to do her job. The program is not offered by her – idiots – it is offered through a bank. I actually bought through her on this program and she took every precaution to ensure that I was not getting in too deep and that I fully understood everything before I decided to proceed – and I am happy I did. She invited you to call her – did you bother? or is slamming someone is just too much fun? Perhaps some research would be a good idea – but then you don’t really care – do you? By the way – what were your credentials again? I was impressed by her – I am not impressed by you. I too, choose to remain anonymous, but I wanted to impress on anyone reading this to consider the source.

    • bubbly | 6 July 2011 at 1:55 pm | Reply

      Yes and when a used car salesman offers you a broken piece of junk obscured by his sweet talk, it’s the car manufacturer’s fault. The salesman is not responsible for what he is selling, right? :roll:

      I think DB may be too deep in it too…

  11. vreaa | 6 July 2011 at 11:52 am | Reply

    DB ->
    1. Yes, almost everybody here (including you) is anonymous. Such is the nature of discussion on the web. That doesn’t mean it should be discarded out of hand. History shows that there are many circumstances that arise in societies where opinions from anonymous sources may be valuable. The web facilitates such discussion; it is one of its strengths.
    2. Like you, we also prefer comments that don’t descend to the use of obscene language or ad hominem attacks. We do our best to moderate out more extreme versions of the same, but, at the same time we try to keep all moderation to an absolute minimum. Thus, mild versions of these types of comments will usually escape moderation.
    3. A question for you: This realtor is facilitating the sale of a mortgage product that allows people to get into very large amounts of debt (how high could this go 400K? 600K?), while only putting down $1000. Please explain how, in the current Vancouver/LowerMainland market, she can at the same time “[take] every precaution to ensure that [they are] not getting in too deep”. Surely the fact that the person taking on the debt is unable to come up with even 5% of the purchase price is evidence in itself that they are ‘getting in too deep’?
    4. We are not blaming realtors solely, least of all this specific individual, for the predicament in which Vancouver RE finds itself. We are simply here reposting an ad designed to attract sub-prime borrowers, for the record. There are so many claims that lending is not loose in Canada that it is worthwhile registering any evidence to the contrary.
    5. When it comes to assigning blame for a speculative mania, it stretches from the consumer who is overextending themselves to buy, up through the brokers (realtors/banks/mort.brokers), to the banks setting lending policies, to the Minister of Finance setting loose mortgage guidelines, to government agencies mispricing mortgage insurance risk (CMHC), to the Central Bank setting (and holding steady) ‘emergency’ (‘criminally’?) low rates, and even to the off-shore entities that caused overliquidity in the first place (Greenspan; Bernanke; Central Bank of China; other central banks..).
    But, that doesn’t mean that each link in the chain can claim to be blameless. When this realtor sits down with a client and sells them a overpriced property, and a $500K mortgage with nothing down, she is doing her bit to keep the mania afloat. And we are quite prepared to call her out on that.
    It’ll be interesting to keep track of the financial situations of these borrowers as the market deflates. They will be the first and, in some cases most severe, casualties.

  12. DB | 6 July 2011 at 2:03 pm | Reply

    The sky is falling, the sky is falling – we will all die a financial death in the near future. The Real Estate market bubble is going to burst. Just look at what happened in the States! Did I miss anything? Oh – my soapbox – hold on. There, that’s better. Now I can put forth my opinion as gospel and say that for the greater good I will pick on an individual to prove my point. Never mind that this individual is one of many thousands in her profession, we will fight our cause by targeting one individual by name on the internet! After all, the end justifies the means!

    First of all, to “Verra”. I take it that you are the mediator of this site that you condone and allow the posting of people’s names. I dealt directly with this individual and have personal knowledge of her ethics. I question yours. I feel that it brings into play the question of the morality of this website.

    I have my OPINION and I certainly do not begrudge you or anyone, the forum to put forth their OPINIONS. You don’t like realtors – okay. You don’t like mortgage brokers – okay. You think real estate values will drop – okay. Blog all you want, but don’t get personal.

    I called this realtor to advise her of this blog. She was in tears. After spending 25 year helping people WHO WANTED HER HELP to find the property they wanted and arrange the financing for them THAT THEY ASKED FOR you attack her personally. I suggested that she also post her opinion here and her response was “I never hide my name, number or email address and I welcome anyone to contact me with their questions. I am not scamming anyone and I do not ruthlessly pursue people who can’t afford this program. I put the information on my web page of a legitimate program offered through CMHC and leave it to people to contact me if they are interested. Now, because I am so forthcoming with the information I get bashed on the internet – I will not respond.”

    In answer to your question: “This realtor is facilitating the sale of a mortgage product that allows people to get into very large amounts of debt (how high could this go 400K? 600K?), while only putting down $1000. Please explain how, in the current Vancouver/LowerMainland market, she can at the same time “[take] every precaution to ensure that [they are] not getting in too deep”. Surely the fact that the person taking on the debt is unable to come up with even 5% of the purchase price is evidence in itself that they are ‘getting in too deep’?”

    I could have waited and saved my deposit. No problem. First of all, let me clarify. I had to qualify for this mortgage. It is not handed out freely to individuals who have no income to justify it or who have a huge debt load. I had to justify my income and I have an excellent credit rating. I actually qualified for a much higher mortgage than I took but after going over all the numbers I chose the payment level where I was comfortable and shopped within that price range all at the advise and information provided to me by this individual and at no time was I pressured to proceed. I was given the information and left to make my own decision. Irresponsible? – I don’t think so or rather IT IS MY OPINION that the move I have made was a very responsible move.

    Further, IT IS MY OPINION that in waiting I would have been paying rent for two more years. IT IS MY OPINION after studying the market statistics for past 30 years that I have made an investment in real estate that will continue to have its ups and downs over the course of my ownership but that I will be gaining equity in my home by paying down my mortgage regardless. Something I will never achieve by renting. IT IS MY OPINION that interest rates are as low right now as they are going to be for years. By locking in my mortgage rate for five years I have guaranteed myself “no rental increases” for five years. By applying the additional funds that I otherwise would be saving to my mortgage during that five years I am way ahead of the game. IT IS MY OPINION that I like owning my own home. I have painted the walls the colours I like. I have invested in window coverings that I love. Again, something I can not do if I am renting. IT IS MY OPINION that owning real estate is still a good investment.

    I can only guess that it is YOUR OPINION that real estate is going to crash and that people should all sell quick. Way to try and cause a market crash. Good job. People have been saying that for the last 30 years. You are not first and you will not be the last. Will the prices go down? – maybe, but IT IS MY OPINION that even if they do, they will rebound as they have in the past.

    You are a naysayer and you are welcome to be one. This post, however, could have been achieved and your opinion freely given without naming names especially when you have never had any personal dealings with this individual. I personally think it belittles your opinion and the integrity of this site AND THAT IS MY OPINION.

    • bubbly | 6 July 2011 at 2:11 pm | Reply

      What a load of bullshit! You question the morality of this website? How about questioning the morality of taxpayer’s support of the gambling done by bank industry. When the times are good, profits flow into the banks and if they ever end, the taxpayer will foot the bill. This is the ONLY reason why someone like you would even get a mortgage!

    • Aldus Huxtable | 6 July 2011 at 4:45 pm | Reply

      “I have painted the walls the colours I like. I have invested in window coverings that I love. ”

      I painted my walls in my rental apartment and bought winder coverings that I’m just alright with, however, I have not invested in window coverings as I have yet to see any that particularly appreciate in value over any period of time. You may wish to seek further investment advice on all fronts in the future.

  13. Derp Derp | 6 July 2011 at 2:19 pm | Reply

    tl;dr

  14. DB | 6 July 2011 at 2:25 pm | Reply

    Do you have a mortgage bubbly?

    • bubbly | 6 July 2011 at 2:34 pm | Reply

      I own some real estate outside of Canada with no mortgage. I don’t have a mortgage here either even though I can more than afford it, including a “traditional” one with a large down payment.

      On the other hand, it looks to me like you are either too deep in debt or your first name is Lesley (or your boss’)

  15. DB | 6 July 2011 at 3:10 pm | Reply

    You own real estate outside of Canada? Possibly in the States? Did you get caught up in the plummeting market or were you one of the ones that rushed in to buy low at the expense of those who had lost so much? Either way, bubbly, you are entitled to your opinion and have at it. At least you are attacking an anonymous person on the internet – and I have no problem with that. We don’t have to agree. My first name is Debbie and I work as a paralegal and have for many years. I do not work for Lesley, neither am I Lesley – but good try. Lesley was my realtor and mortgage broker. I have no interest in getting into a pissing match with anyone – I felt outraged by a group of people who attack an individual to try and reinforce their opinion instead of relying on facts and thoughtful arguments. People do not have enough respect for the internet and callously use it to their own benefit in ways that can negatively affect other people’s lives. Most sites would not allow such an attack. So, attack the program, attack any banking conspiracy you want, put forth your opinions – that is all good, but do it without getting personal.

    • Derp Derp | 6 July 2011 at 3:24 pm | Reply

      if this is your definition of attacking then i would hate to see how you react to the real world..

      better put your helmet on

      • Derp Derp | 6 July 2011 at 3:25 pm |

        lol there’s the thought-terminating-cliche we were all waiting for: ‘conspiracy’ :P

    • bubbly | 6 July 2011 at 3:31 pm | Reply

      Debbie, your “arguments” lack logic and are instead a combination of emotional blackmail and subtle ad hominem.

      1) Emotional blackmail: “or were you one of the ones that rushed in to buy low at the expense of those who had lost so much?” Are you serious? The ones who bought after the crash did so at the expense of those who “lost so much”? If you knew the basics of economic theory, you would know that without those who buy after the crash, the market would go even lower resulting in even more people losing their homes. And you should also know that many of those who “lost so much” didn’t have that much to lose (financially) to begin with. They often had zero down ARM mortgages. And THAT was part of the problem – no skin in the game. And Lesley now offers this same toxic type of mortgage here in Canada.
      (And FYI my real estate holdings are in Europe)

      2) Your “subtle” ad hominem: “attack any banking conspiracy you want” You are basically just calling me a conspiracy nut. That makes me think that you probably do not know how CMHC works and where it will get money if the market experiences a significant number of foreclosures. You probably do not know the meaning of “lender of last resort”, you do not know what is the difference between market based interest rates and artificial interest rates set by the central bank. You do not know what “stimulus” and “too big to fail” really means. All you know that Lesley is did everything so that you can get a “safe” no money down mortgage. Perhaps you should do something about your state of ignorance. You don’t have to read any crazy conspiracy websites. Just buy a book about economics, read official information about CMHC, read what the government had to say about banks and real estate in the past few years and maybe you will get it.

      • bubbly | 6 July 2011 at 3:35 pm |

        Sorry about the unclosed i tag vreaa. I hope you can fix it from the admin area.

  16. DB | 6 July 2011 at 3:45 pm | Reply

    Thank you for your opinion bubbly – I appreciated it. What is an ARM mortgage? I would really like to know. Is that what we have in Canada?

    • bubbly | 6 July 2011 at 3:52 pm | Reply

      ARM = Adjustable Rate Mortgage. Not always bad but riskier.

      A worse version was option ARM. Same as ARM but with an option to pay less initially (for a few years). The side effect is that the mortgage principal would grow. Once it grew to 110% or 120%, the option would be removed and the holder of the mortgage would have to make full payments while his/her debt would be 10% to 20% higher than at the beginning.

      Then there are “teaser” rates which still exist in Canada…

  17. DB | 6 July 2011 at 3:55 pm | Reply

    Thanks bubbly – thank god that is not what I got into. I can understand now how it worked in the States. That is awful!

    • bubbly | 6 July 2011 at 4:01 pm | Reply

      Np/
      We have similar craziness here in Canada too.

      However, in the US, these types of mortgages were just the trigger of the meltdown and people with other – more “safe” and “traditional” mortgages suffered shortly after. *If* you buy too high and the market crashes it won’t make that much difference what type of mortgage you have.

    • JRoss | 6 July 2011 at 4:21 pm | Reply

      “thank god that is not what I got into”

      Are you sure? Did you lock in for more than 5 years? What will your payments be when the renewal is done at a higher rate than today?

      • Derp Derp | 6 July 2011 at 4:27 pm |

        who cares, it always goes up

        don’t be a worry wart, you conspiracy theorist

  18. DB | 6 July 2011 at 4:53 pm | Reply

    LOL – good try Derp Derp – but it is still in italics. Don’t know how to stop it. It is nothing I did. I am going to sign off now bubbly – I really did learn something from you today and I thank you. Just so you know, I did research the stats for the last 30 years on market values and interest rates before I bought and I just don’t see the doom and gloom. I have faith that our Country’s financial experts have learned by what happened in the States and I don’t see it as our future. I think the market will continue with its ups and downs and I am content to be riding the wave. At least I am in the game. My point on coming on this site was never that I don’t want to learn, it was the personal attack on my realtor that made me so angry and against a program that has worked so very well for me. I would caution anyone from buying more than they can afford and I agree, the should do their own research and formulate their own opinions on the real estate market. I think that most people are optimistic that the glass is half full, not half empty. I will say though, that Canadians should stop the reckless spending and living beyond their means. If you can’t be disciplined then leave the charge cards (at 24% interest) at home and just carry your debit card or that old fashioned stuff – money.

  19. DB | 6 July 2011 at 5:01 pm | Reply

    Just one last comment to JR Ross – yes, I’m sure. I could write a mortgage from start to finish all 35 pages. I am a paralegal. Oh, and I do expect that the interest rates will be higher when I renew in five years – how could you not?

    • JRoss | 6 July 2011 at 5:36 pm | Reply

      Fair enough. Serious question then. Based on your experience, what is the difference between a standard 5-year or less mortgage with next-to-nothing down that will have a higher rate when it is renewed that re peddled by our prudent and knowlegeable bankers and the sub-prime ARMs with adjustable rates that caused so much trouble in the US?

  20. DB | 6 July 2011 at 6:16 pm | Reply

    Really – do you want an answer to that? I just learned about the American ARM mortgages from bubbly earlier today. Read her blog above. Then understand that is a conventional mortgage with a 5 year term. You can’t get a cash back mortgage with less of a term than 5 years. The FIRST term of the mortgage is at the Bank’s posted rate (not discounted rate). You make your payments and the interest rate DOES NOT CHANGE for 5 years. During the first 5 years of my mortgage I will payoff the CMHC fee portion of my mortgage completely and I will have paid down the principal by a further $4,000.00 and that is if I don’t increase my payments by the allowed 15% or make a prepayment which is allowed up to 15% annually. Paying rent for those same 5 years nets me nothing. My current rate is 5.39% so when I renew in 5 years I really don’t expect that much of a shell shock. Even at that, it could double and I would still be okay. For the short term I could even survive triple that amount of interest. When I look at the interest rates over the last 15 years – I feel pretty safe. This was all reviewed with me by my mortgage broker. The rest is all speculation about what the market will or won’t do. If it goes up – I win. If it stays the same – I win because I now have equity in my home. If it goes down – I still win because I still have my home and I just hang on until the market recovers – which it always has – at least over the last 30 years that I reviewed.

  21. DB | 6 July 2011 at 7:25 pm | Reply

    Do you mean Prime minus mortgages? I was advised by my mortgage broker not to gamble – lock in the rate and then I know exactly where I stand for the next five years – except for property tax increases and repairs and maintenance around my home. So, personally I agree 100% that I am against the mortgage that attaches itself to the Prime Lending Rate for anyone in my position.

  22. vreaa | 6 July 2011 at 7:52 pm | Reply

    DB ->
    Thanks for all the clarification.
    Please note (again) that this post was simply a screen capture of Lesley’s own web-page, and nothing more. On this occasion we were simply archiving the existence of zero-down mortgage offers in Vancouver/LML.

    Questions for you:
    Do we understand you correctly that after 5 years of mortgage payments, your principal will have dropped by just $4,000?
    When you did your math, we presume you calculated in the effect of any monthly fees, annual taxes, and the cost of maintenance of the property. Is that correct?
    When you say “Even at that, it could double and I would still be okay. For the short term I could even survive triple that amount of interest.” – we presume you’re saying that you could tolerate double or triple the amount of the interest payment, not double or triple the interest rate itself… there is a massive difference, we trust you are aware of that. (Or are you?) Our hunch is you wouldn’t be sanguine about a doubling of rates. (As interest rates go up a little, the percentage of each month’s payment going to interest goes up a lot.)

  23. DB | 6 July 2011 at 9:27 pm | Reply

    verra -
    Thanks for the clarification – I didn’t believe you – but thanks for that feeble excuse. I certainly was offended by the derogatory comments made on this page about someone I know and trust. Also, please, share with us all the other pages your archives showed of the existence of zero-down mortgages offers in Vancouver – Canada. This blog could have been made in general without the singling out any one Realtor/Broker to be the recipient of the crass comments made by some of your members. It was personal, and it was an attack – there is no doubt about it. Especially the link posted by Derp Derp above which I did not notice earlier. How does one add to a previous post? If that is not personal – what is? AND what purpose does it serve other than a personal attack. I called Lesley to tell her about it and the funny thing is she can no longer access your site. That is also bizarre.

    Secondly, thanks for asking about my mortgage. I was going a vague memory of how much I will pay off during the first five years and because you asked, I actually pulled out my Disclosure Statement. This is a Statement of your mortgage which must be provided with all Canadian mortgages. I say this because it is hard to tell where you and your members are based since there is so much American content on your web site. Anyway, I will have paid off a lot more than I thought. My total mortgage including CMHC fees was for $343,000.00. After five years of payments, during which the interest rate remains frozen, my balance, without any additional payments, will be $316,000.00. At the time of closing I received over $18,000.00 as my down payment towards my purchase price of $350,000.00. (I am rounding off all the numbers) So I am actually gaining a lot more than I thought by about $30K. My bad, I shouldn’t not have gone on memory so thanks for asking.

    Did I budget for maintenance and taxes? No of course not, I am a moron. I purchased a small house so there are no “monthly fees” and in Canada we do not have Homeowners Associations. Just as a stretch, I thought I should also make it clear that I budgeted for water/sewer, hydro, gas and cable as well. I also have multiple savings accounts for multiple purposes that I contribute to each month. Good enough? I guess I earned that good credit rating somehow.

    In five years even if interest rates climb to 10% – I will be fine. If they go up to 15%, I might need a roommate but I will survive.

    Hopefully that answers your questions and also, hopefully, you are able to control the content of this web site. For my part, I thank you for the opportunity to fully explain my position without censor – but then, I really haven’t said anything that needs to be censored. At least people will get the truth when they read this. This plan is not for everybody but it works for me.

  24. DB | 6 July 2011 at 9:44 pm | Reply

    verra

    Thank you.

  25. vreaa | 6 July 2011 at 10:29 pm | Reply

    DB -> You requested other ’0 down’ archives on VREAA; we’ve posted examples over the years, here are a few:

    “Are you tired of paying someone else’s mortgage?”
    16 Nov 2010
    http://wp.me/pcq1o-1xh

    Free Money Still On Offer – “Free mortgage payments for up to 2 years; no money down mortgages; cash back mortgages; self employed mortgages.”
    3 May 2010
    http://wp.me/pcq1o-Of

    No Doubt That Easy Lending Fuels Vancouver RE Market
    31 May 2008
    http://wp.me/pcq1o-1C

    • Get Real | 6 July 2011 at 10:51 pm | Reply

      Oh! Please VREAA..stop this love fest with DB.

      All this pretensions about “honest” people doing “honest” work and helping others is nonsense.
      The mortgage broker (with 25 yr of experience, who cried after reading this blog, sob..sob..) is busy taking advantage of the gullibility of people for servicing no one but self..

      DB on the other hand has just been “serviced” and has bought into a 0 down mortgage, the value of which is likely going to go down in the next few years.

      Pleas do not waste your time on a scam artist, and an idiot (as in the greater fool)…

  26. Froogle Scott | 6 July 2011 at 11:07 pm | Reply

    Freedom of speech. It means the realtor/mortgage broker in question can post her offer, others can attack what they consider the dubious ethics of the offer (perhaps finding it hard to separate the ethics from the person), and yet others can defend the offer.

    A couple of points. If you act as both the mortgage broker and the listing realtor on a package deal, you’re earning two commissions. Not bad. I’m not sure if it constitutes a conflict of interest. I’m assuming that you’d be more interested than the average mortgage broker in seeing a client successfully approved if you are then in a position to sell the client a house or a condo. I also wonder if you’re going to shop around for the lowest rate for your client, or if, depending on the client, you’re going to deal with the lender most likely to approve the loan. In the case of this particular promotion, the trade-off seems to be you have to pay the posted rate of 5.39%. Posted rates are typically at least 1% higher than what most people can negotiate themselves just by visiting a couple of different banks. One local mortgage broker is currently advertising 3.65% as their best five-year fixed rate.

    This statement on the screen capture from the realtor’s web site is one that is not going to sit well with many on this blog:

    “House prices are the lowest you are going to see them in many years, as are interest rates. Jump in now while you have the chance.”

    No argument with interest rates being the lowest we’re ever likely to see them, but the statement that current house prices are the lowest we’re going to see them in many years is highly questionable. It’s just as much of a wild-ass prediction as anything uttered by the most ardent doomer. How can anyone state that as fact? It’s a rather transparent attempt at manipulation. And interestingly, the statement appears to have been removed from the live version of the web site — although I may not be looking at the correct page.

    Ah… as the bubble turns… in all its iridescent beauty.

  27. Get Real | 6 July 2011 at 11:10 pm | Reply

    PS:
    People with 0 percent mortgage play much more interest than principle, and people like DB do not factor in a RE downturn…

    Are you an immigrant DB, if yes then how long have you been in Canada.

    Sorry to ask but in my experience, the new immigrants are the most gullible. Your emotion driven posts defending a mortgage broker seem very immature

    • Derp Derp | 7 July 2011 at 1:55 am | Reply

      no one named debbie is an immigrant

      the name debbie is strictly a north american phenomenon. i’ve known more than a few.

  28. CanuckDownUnder | 6 July 2011 at 11:12 pm | Reply

    The thing I can’t get my head around with this anecdote is that “Debbie” has put together budgets and has multiple savings accounts, suggesting a relatively high degree of financial literacy, yet she hasn’t bothered to perform any rent v. own calculations. Or if she has I think she messed up somewhere.

    How else could you think that you win by owning in this environment, even if prices stay the same or go down from here?

    • vreaa | 6 July 2011 at 11:43 pm | Reply

      In a similar vein: Anyone want to try to crunch DBs numbers and see what emerges?

      • CanuckDownUnder | 7 July 2011 at 2:36 am |

        A quick plug into the mortgage calculator: 30 year, $343,000 borrowed, 5.39% for five years, monthly payments would be $1911.19.

        Averaged out over the 60 months “Debbie” is paying $442.97 in principal and $1468.22 in interest. Now add property taxes and maintenance expenses to that interest total and renting looks pretty good in the absence of this bubble hitting astronomical heights.

        Will “Debbie” really be fine in 5 years the interest rates is 10%? With the remaining principal and a 25 year amort, the payments would go up to $2830.35 per month. And if the interest rate was 15%? The monthly payments would be $3943.08! At that point she better get a roommate and a good bankruptcy lawyer.

      • Derp Derp | 7 July 2011 at 5:40 am |

        aiyee

  29. Get Real | 6 July 2011 at 11:12 pm | Reply

    Oops..typo “principal” instead of “principle” in the above post

  30. vreaa | 7 July 2011 at 10:05 am | Reply

    DB -> Please clarify: How, with a $350K purchase price, and 0 down, did you end up with a mortgage of just $343K?

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