“I ran by the bank to get my closing costs for cleaning up the mortgage. The payout is 415ish with the 5k penalty. So over 7 years we have paid approx $250K in payments and took a whopping $80K off the principle. LOL.. Now to be honest I did know how it works and I knew at the outset how the math works but to actually be reminded of it really made this whole process hit home.”
- Sean in Vancouver, as quoted by Garth Turner, at greaterfool.ca, 28 Oct 2011
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- 05. Where do Buyers get the money? (958)
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- 01 Vancouver Condo Info
- 02 AmericaCanada [retired, no archive]
- 03 Housing Analysis
- 04 RealEstateTalks BC
- 05 Vancouver RE and then some
- 06 Whispers from the Village on the Edge of the Rainforest
- 07 Greater Fool
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- 14 Landlord Rescue
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- 18 World Housing Bubble
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- 20 North American Economics
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Latest Anecdotes:
- Chat Thread
- Taking A Break
- “My best guess: this property is now an ‘investment hold’ and will be built ‘when prices recover’. Good luck on that!”
- Man Loses $745,000 Vancouver Condo Deposit
- Graphic – Degrees of Housing Overvaluation in Canada
- The Rare Individual With A Negative Ownership Premium
- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
- “I just visited Manhattan for a week, and happened to snap some real estate ads on both the Upper West and Upper East sides of the island. Compare to Vancouver. It simply doesn’t compute.”
- Ben Rabidoux In Vancouver Next Week
- “The mortgage company told me they were calling in my 40-year, 0-down mortgage. I have paid nearly sixty thousand dollars towards it, but, nearly five years in, I have yet to touch the principal.”
- ‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version
- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
- Downside Weights On The Vancouver RE Market – “One of the older guys (over 60) mention to the guy beside him that he and his wife were thinking about selling their family home, and renting, in order to get some of the money that was locked up in the house.”
- “My buddy was looking to upgrade to a house in the Coquitlam area. With 200k extra for a home, that’s half of lifetime saving between him and his wife.”
- “I was walking in the Fraser neighborhood yesterday, I noticed that the population, on average, seem to be composed of workers. I belong to the top 5 percent in terms of income. Nevertheless, I cannot afford any of the houses for sale in that neighbourhood.”
- “Vancouver is an urban resort whose value mostly resides in its real estate and not much else.”
- “Rogers Communications is expanding into RE; aiming to relaunch website; providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.”
- I’m only 50 and I can just about retire if I want to, all because of a single simple decision – “When prices rebounded to their former highs, then rocketed another 30% higher to what I considered to be totally unsustainable levels, I decided that only a fool would pass up a second opportunity to harvest such a massive non-taxable capital gain, and in 2011 I sold my place.”
- The Vacant Lot of Versailles, Richmond.
- “I don’t think that most people think things are going to crash, just that there is going to be a slight correction, but it was amazing to me how sentiment has changed, and the fact Vancouver RE is too high was just understood.”
- “The ‘investor’ who purchased our house put it up for sale two months later, in January 1981, but the bubble had burst.”
- For A City To Have That Kind Of Vacancy, It’s Like Cancer – “Downtown, the vacant unit rate is so high that it’s as though there were 35 towers at 20 storeys apiece – all empty.”
- “What’s the worst that can happen? You can’t pay your mortgage, so sell your house! No fear.”
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I suspect that some people who claim to have made money in real estate never took the interest expenses into account. As long as prices increase 20% a year, they are easy to ignore.
I don’t understand how people can think saving is hard, yet think so lightly of taking on debt. It’s harder to repay debt than to save, especially if your housing costs are higher.
Here’s one (I told this a while back): family bought in 1998 with $250K mortgage. Their mortgage amount today: almost exactly the same, due to refis to fund renovations. Ah but you say that increases the value of the property. No, not really, they end up depreciating the renos, after another 10 years they’re likely back to square 1; the renos treaded water at best. They told me they were taken aback by how hard it was to pay down their mortgage when properly accounting for all the other costs associated with home ownership.
And no they’re not going to sell despite their property appreciating close to 2.5X. Kids in school age, will be there for at least another 20 years.
“They told me they were taken aback by how hard it was to pay down their mortgage when properly accounting for all the other costs …”
http://tinyurl.com/5t68mh8
You can rent a place, or you can rent money for a place.
what did Sean do with the place? signed a new mortgage at lower rate? disposed it? Did Sean fail to disclose how much he pocketted from the proceed of sales, or Garth omitted to report the rest of the post?
with $2k a month in interest expense, how much did that contribute to his own living quarter? how much rent did he collect?
Good work missing the point of the article.
y you ask so many stooped questions?
I know a guy who bought a house in 1988 for $85,000 and today owes $250,000 in refi’s and the dumb thing is he has no top quality vehicles or other toys to show for it and he is a well paid electrician for all that time. People have good intentions to pay off the mortgage but most just become slaves to the bankers. His house is also in need of major update which makes it even more unbelievable. He’s made paper profit on the house but being in a shaky marriage he may wind up with diddly squat in the end.
right, you have to be out of your mind to buy a house if you need to take out a mortgage. Fools gold
the ther there isnt such a sto stooped ques quest question. the only sto stooped minds always jum jump in a pi piece of toi toilet anecdote and com comment on it without ques question asked.
So we now have fred/Fred (different icons)? Are you telling me the creative well has run dry already and you’re now resorting to playing with capitalization?
“you’re now resorting to playing with capitalization?”
fred is playing with capitalization. Quite.