WHAT DO YOU BUY – A CONDO OR A HOUSE WITH A SUITE?

General Rupi Tatla 31 Mar

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 me.

NEW TO CANADA AND ESTABLISHING CREDIT

General Rupi Tatla 9 Mar

New to Canada and Establishing Credit


When you are new to Canada and establishing credit, deciding on the best way to create a good credit history can be difficult.

You need a good credit rating in Canada if you are planning to rent or buy a home, buy a car or borrow money. By taking some important first steps to get your financial matters in order, you can establish a solid foundation for future credit worthiness.


The first steps when you are new to Canada and establishing credit are:

  • Open a chequing and savings account with a local bank or credit union
  • Get a cell phone through one of the local providers. Your payments on that account will report to the credit bureau.
  • Apply for a secured credit card. Even if you start off with a limit of $500 you can always increase it at a later date. Pay some of your regular monthly bills (such as your cell phone or cable bill) through this credit card so you can start to show consistent repayment behaviour.
  • Aim to establish a minimum of $2,000 credit limit with two credit cards or a loan and credit card. Lenders and the credit bureau consider two years of active credit use as a good foundation for credit worthiness.

I recommend you check your own credit report on an annual basis or within six months of making any major purchase. Visit www.Equifax.ca for more information.

For more information on establishing credit and managing your money visit www.mymoneycoach.ca.

Buyer Beware

There are many options available to people needing credit and some of them will get you into financial trouble if you are not careful. There are companies offering alternatives to credit cards. They often advertise online, by phone or flyers through the mail. They offer to provide loans that will help borrowers establish good credit. These programs all sound good until you look closely at the numbers. For more details, contact your local Dominion Lending Centres mortgage professional.