# Buying a house - mortgage values



## NaeKid (Oct 17, 2008)

http://www.theglobeandmail.com/glob...the-debt-averse-house-hunter/article14264162/

*A rare breed: Home buyer balks at a $500,000 mortgage*



> Debt does not rest lightly on his shoulders.
> 
> That's why a guy we'll just call Frank is having a tough time in the current Toronto real estate market. He figures he'll have to borrow upward of half a million dollars, and he's freaking out.
> 
> ...


*What should Frank do?*

Suck it up and buy a house already.
Buy a larger condo that has more space for his family, but costs less than a house.
Just say no to the housing market and rent.
Other - fill in a blank


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## boomer (Jul 13, 2011)

Frank and his wife may want to look at finding work in a less expensive housing market. One where earnings to housing ratios are more within their risk tolerance.


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## FatTire (Mar 20, 2012)

Other. Frank should save his money, and start building a skill set that makes him more capable of living self sufficiently. Then Frank should cash out of the rediculous corporatist mess, buy a piece of land, build a house and put in solar panels and alternative power sources. Plant a garden, get some edible critters, and maybe a rifle. 

I spose i could be a little biased


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## Country Living (Dec 15, 2009)

I was going to say Frank should trade his "I want it now and I don't care how you get it" wife for one who more closely follows his financial management style; however, the backlash from some members of this board might be painful. Oh, what the heck.....


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## boomer (Jul 13, 2011)

I chose to see what she wanted "now" was some dirt on which to grow the garden, raise the kids etc. There really is little point to owning a house on a piece of dirt if no one is ever there excepting to sleep.


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## NaeKid (Oct 17, 2008)

Country Living said:


> I was going to say Frank should trade his "I want it now and I don't care how you get it" wife for one who more closely follows his financial management style; however, the backlash from some members of this board might be painful. Oh, what the heck.....


That is exactly what I was thinking ...

:cheers:


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## 21601mom (Jan 15, 2013)

Country Living said:


> I was going to say Frank should trade his "I want it now and I don't care how you get it" wife for one who more closely follows his financial management style; however, the backlash from some members of this board might be painful. Oh, what the heck.....


I agree, with one aside. Would it make a difference if she were the primary breadwinner? In his situation, he probably makes more, but if not, does that change your perspective?

For the record, a 500k mortgage is beyond outrageous! We would never, ever go into that much debt.


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## Country Living (Dec 15, 2009)

21601mom said:


> I agree, with one aside. Would it make a difference if she were the primary breadwinner? In his situation, he probably makes more, but if not, does that change your perspective?
> 
> For the record, a 500k mortgage is beyond outrageous! We would never, ever go into that much debt.


Nope, not at all. They're not in sync with their financial values and that is a recipe for disaster.


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## tsrwivey (Dec 31, 2010)

Other - live in a cheap dump, trailer, or even their parents (preferably his) basement to save up the money. While living well beneath her means or with her mother-in-law, I bet she'll be happy with a much cheaper house.


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## NaeKid (Oct 17, 2008)

21601mom said:


> I agree, with one aside. Would it make a difference if she were the primary breadwinner? In his situation, he probably makes more, but if not, does that change your perspective?
> 
> For the record, a 500k mortgage is beyond outrageous! We would never, ever go into that much debt.


It should be said that they are in Toronto. A garage-package sized house (400sq-ft) with no basement on a piece of raw-land would sell there for $350,000 ... it isn't the cost of the house on the land out there, it is the cost of the land itself.

Same thing with Vancouver. My baby-sister has a town-house that cost $750,000 and it is about 1,000sq-ft on each floor (three-floors, one as a basement). She can't afford the house, but, she can't afford to leave (or, she doesn't want to leave).

Myself, living away from the big city, I have a $300,000 place, but, the same size place (with same amount of yard) in Calgary-city-limits, I would have about a $750,000 house ... and I only live a 1/2hr north. Location is everything, and, the better the location (and the better view), the more coin that is spent.

Oh, just as an aside. I know of a raw piece of land in Calgary that is about 40' (front) by 60' (side) in size and it is currently listed for $1,200,000 ... yes, one-point-two million dollars.


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## Country Living (Dec 15, 2009)

Wow... we bought a 100 acre ranch complete with buildings and equipment for 1/3rd of your big city houses.


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## 21601mom (Jan 15, 2013)

Country Living said:


> Nope, not at all. They're not in sync with their financial values and that is a recipe for disaster.


I totally agree, I just wondered if people had considered that. The scenario seems to lay this out as his decision, not their decision; certainly doesn't help that she wants the bigger house, no matter what. I just wondered what people's perspective on this would be if she had the higher salary.

And Naekid, those prices are beyond ridiculous. I hope Canadian salaries are higher and can support those prices.


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## tsrwivey (Dec 31, 2010)

21601mom said:


> I totally agree, I just wondered if people had considered that. The scenario seems to lay this out as his decision, not their decision; certainly doesn't help that she wants the bigger house, no matter what. I just wondered what people's perspective on this would be if she had the higher salary.
> 
> And Naekid, those prices are beyond ridiculous. I hope Canadian salaries are higher and can support those prices.


In our house, big financial decisions require two "yeses" or one "no". If he's saying "no" & she says "yes", then his position has to change for the deal to go down. It makes absolutely no difference who makes what & it hasn't in 22 years of marriage. We are a one pot household, we are one unit.

I am female & I make good money but I would never want a stupid house more than I want for my husband to have peace of mind. Nor would I ever let hubby know I wanted something we couldn't well afford.


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## Tweto (Nov 26, 2011)

Here is a crazy statistic, even with mortgage rates (means death grip in latin) being almost the lowest in 50 years (going up now) 40% of the houses sold are being purchased with cash. One of the reasons for this are that the buyers are people that see buying rental property as a better way to invest their money then the stock market. There are very few first time buys now.

If I was that guy I would not buy now. I think there will be another collapse in the house values and that will be the time to buy. Another option would be to buy land and then as you had the money to put in a well, put an RV on it to live in and then eventually build a home.

BTW $250,000 will by a nice acreage with house in the plain states.


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## tsrwivey (Dec 31, 2010)

Tweto said:


> Here is a crazy statistic, even with mortgage rates (means death grip in latin) being almost the lowest in 50 years (going up now) 40% of the houses sold are being purchased with cash. One of the reasons for this are that the buyers are people that see buying rental property as a better way to invest their money then the stock market. There are very few first time buys now.


Yep. That's exactly what we did. We pulled out of the stock market right before everything went to sh!t & bought rental property. We still haven't gotten back into the stock market, I don't know that we ever will. A much more stable market, especially here in east Texas.


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## TheLazyL (Jun 5, 2012)

NaeKid said:


> http://www.theglobeandmail.com/glob...the-debt-averse-house-hunter/article14264162/
> 
> *A rare breed: Home buyer balks at a $500,000 mortgage*
> 
> ...


4) Buy $250,000 dollar house.


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## LincTex (Apr 1, 2011)

Country Living said:


> I was going to say Frank should trade his "I want it now and I don't care how you get it" wife for one who more closely follows his financial management style...


I was thinking the same exact thing.



Country Living said:


> They're not in sync with their financial values and that is a recipe for disaster.


HUGE. They need to do a lot more talking (or a lot more listening) and need to be more realistic!!!


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## LincTex (Apr 1, 2011)

NaeKid said:


> Myself, living away from the big city, I have a $300,000 place, but, the same size place (with same amount of yard) in Calgary-city-limits, I would have about a $750,000 house ... and I only live a 1/2hr north. Location is everything,


Wow........
I am just a stone's throw from Corsicana, Ennis, and Kaufman, TX. We have a 2490 sq ft home on 2 acres (about half wooded) and paid $115K.


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## NaeKid (Oct 17, 2008)

LincTex said:


> Wow........
> I am just a stone's throw from Corsicana, Ennis, and Kaufman, TX. We have a 2490 sq ft home on 2 acres (about half wooded) and paid $115K.


Just so that you know that I am not kidding about prices around here ...

Handyman-special, $280,000 in a "bad" area of town (blue-collar area with regular visits by police due to "problems") happening: http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13564027

Here is a "nicer" area of Calgary with a house for sale for $345,000: http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13567745

Another one in the same area just down the street a little bit listed for $404,900: http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13601438

Hmm another one, house built in 1946 in a very old part of Calgary that used to be its own town (Bowness) till Calgary surrounded it, listed for $436,000: http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13509679 ... and that was in the flooded-out-zone right near the river ...

Hmmm ... maybe I will stay in my small-town of 4,000 people and not think about selling out of there and moving back to the big-city....


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## Woody (Nov 11, 2008)

I say get out of the city. Move out to where they can afford to buy. That would curb the wife’s shopping a little too. Any wifey who would demand they move NOW is sure to be expensive to keep around. They will get more land and better quality of life out of the city. Be better for the children also. Oh, make sure he looks north, east or south of work for his new place. If he goes west he gets the sun to AND from work!

When I was looking I did not want to have a huge mortgage and live close to work. Actually there was not much with at least an acre of land and back in 2005 prices were ridiculous. I have a 30 minute commute and bought 1.5 acres with a trailer on it. Put 20% down and have a mortgage that is less than most car payments. I’m happy as the proverbial clam.


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## cowboyhermit (Nov 10, 2012)

We never had a real estate crash like happened in the states, I know of some people around here who bought all kinds of properties in the U.S for next to nothing a few years ago, you could sell one house here and buy several in Arizona/Nevada etc. The prices in major markets are in line with the U.S before the mortgage crisis. Yes, there are bubbles and the government has done pretty much everything it possibly can to encourage people to smarten up fiscally, the Bank of Canada constantly warning that interest rates WILL go up and it will cost x amount on an average mortgage. They can't actually lift interest rates though with the current race to the bottom currency B.S because if our dollar goes too high in the present situation our economy will most likely tank.

For people who want to live in a place like Vancouver or Toronto it is very expensive but for the most part that is the lifestyle they want and there is a lot of money to be made. A lot of these people don't have a vehicle, etc.
I would never want to live in a major city for many reasons, the fact that I could buy hundreds of acres out here for the price of one house is the least of them.


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## boomer (Jul 13, 2011)

There seems to be a presumption here that both of these people are going to be working full time after they have more than one child. Even if she takes maternity leave she is going to be attempting to care for a new born and a toddler in what I am presuming is a high rise condo. Has anyone actually tried to do that? May be what she needs to be demanding is that he be the one to take parental leave and see if he can manage two very young children in the current accommodation. I truly hope they do not have a balcony and are able to put some sort of safety restraints on the windows.

Young mothers have every right to be demanding of young fathers over some issues. The scenario said nothing about her demands other than she was demanding more space "now". We seem to support decent working conditions for people earning a paycheck, why not for people at home with their own children, and how about working conditions for children who are learning at the fastest rate of their entire lifetimes. For anyone who has ever aimed for learning in a concentrated way, they know that learning is hard work also, even for children.


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## cowboyhermit (Nov 10, 2012)

I would never choose that lifestyle personally but hundreds of millions of happy, healthy adults have grown up in small spaces. Look at Japan, or many large cities, lots of great people have come from there. I would even suggest there are healthy ways it could be done, rooftop gardens, parks (Japan has amazing natural shrines everywhere), etc. 
It was common in our area to have a family with 6 kids living in a 24x24 log cabin in -40, unlike in the city people couldn't just go to the library or park or mall.


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## boomer (Jul 13, 2011)

cowboyhermit said:


> I would never choose that lifestyle personally but hundreds of millions of happy, healthy adults have grown up in small spaces. Look at Japan, or many large cities, lots of great people have come from there. I would even suggest there are healthy ways it could be done, rooftop gardens, parks (Japan has amazing natural shrines everywhere), etc.
> It was common in our area to have a family with 6 kids living in a 24x24 log cabin in -40, unlike in the city people couldn't just go to the library or park or mall.


I agree, and values where this works do not include the endless stuff that we inundate our young families with. The small spaces you are referring too are extremely efficient, I cannot say that about most of the smaller condo's that I have seen. CMHC building codes make it highly unlikely that a small condo can be utilized for such a purpose, and how much renovation would they be allowed to undertake without condo association approval and other permits. Then there is the North American dis-inclination to tolerate the decibel level of young children well. What do you do about your neighbors?


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## tsrwivey (Dec 31, 2010)

boomer said:


> Young mothers have every right to be demanding of young fathers over some issues. The scenario said nothing about her demands other than she was demanding more space "now". We seem to support decent working conditions for people earning a paycheck, why not for people at home with their own children, and how about working conditions for children who are learning at the fastest rate of their entire lifetimes. For anyone who has ever aimed for learning in a concentrated way, they know that learning is hard work also, even for children.


No, a wife does not have the right to push her husband to take on more debt than he's comfortable having. She owes it to her kids to not put their father under that kind of stress. its morally wrong & selfish for a woman to force a man into a position where he questions whether or not he will be able to keep the bills paid. Hes an engineer, I doubt there living in a dump. more than likey, shes acting like a spoiled child. They can't afford the house she wants. If she wanted more than he could provide, perhaps she should have married better, delayed having children, or delayed marriage until they had enough money to afford the accommodations she wants. She is living with her children in the house she is in because of her choices. What happens when the house payments eat up so much of the income that you can't afford food & lights? She'll be looking to him to figure it out. It happens all the time.


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## boomer (Jul 13, 2011)

tsrwivey said:


> No, a wife does not have the right to push her husband to take on more debt than he's comfortable having. She owes it to her kids to not put their father under that kind of stress. its morally wrong & selfish for a woman to force a man into a position where he questions whether or not he will be able to keep the bills paid. Hes an engineer, I doubt there living in a dump. more than likey, shes acting like a spoiled child. They can't afford the house she wants. If she wanted more than he could provide, perhaps she should have married better, delayed having children, or delayed marriage until they had enough money to afford the accommodations she wants. She is living with her children in the house she is in because of her choices. What happens when the house payments eat up so much of the income that you can't afford food & lights? She'll be looking to him to figure it out. It happens all the time.


I said nothing about more debt than he is comfortable with, neither did I say anything about less space than she is comfortable with. Your post indicates a way more expectation of obey, than of love honor and cherish.


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## redhorse (Dec 27, 2012)

I think the wife may need some replacing.... 

That said, relocate! Our house in OH cost 75k for a 4 bedroom (small) ranch and 15 acres, mostly wooded. We have since added an adjoining 25 acres. I had a 73 mile one way commute to work. I had to make another sacrifice and buy a decent car that wouldn't break down and got good gas mileage, which is an 09 Cobalt. It has since paid off and I now work from home with the same company, but I would still be making the commute if I had to. The time on the road sucks, but its worth it in the long run. 

As preppers, we should, if able, be getting an out of the way place that allows us to be self sufficient as much as possible. Get out of the area that is high priced and find something affordable in the country. There are numerous areas that are suitible across the US. 

Someone else had mentioned that they forsee another housing market crash. I agree. I work in the mortgage business. I am an underwriter. Let me tell you the government is wanting us to release some scarey programs that remind me of what was going on prior to the 08 collapse.


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## tsrwivey (Dec 31, 2010)

boomer said:


> I said nothing about more debt than he is comfortable with, neither did I say anything about less space than she is comfortable with. Your post indicates a way more expectation of obey, than of love honor and cherish.


Perhaps you missed the original post, let me quote "That's why a guy we'll just call Frank is having a tough time in the current Toronto real estate market. He figures he'll have to borrow upward of half a million dollars, and he's freaking out.

"It's a death sentence," said the 35-year-old husband and father of a young child. All three are living in a 700-square-foot downtown condo, and Frank says they need to move. "My wife wants more space, now, and she doesn't really care how we get it."

It has nothing to do with "obey", if she's okay with that much debt, no one can stop her from buying whatever house she wants that SHE can pay for independently. However, if she wants HIM to be responsible for paying for it, he has to consent. Apparently I'm not the only one who thinks so since his signature & consent must be given to buy the house &/or take out the loan. Perhaps he should just obey her? When they divorce, who do you think the bank is coming after for the money, the engineer or the secretary?

I am a wife & while I don't feel compelled to "obey" my husband, I do respect him tremendously. The well being of our family is always first & foremost in his mind. I would never want to move forward with anything he wasn't comfortable with. I cant imagine going into a level of debt my husband considers a death sentence. :eyebulge: would you advise a friend to take on that kind of debt?


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## boomer (Jul 13, 2011)

I happen to know secretaries who make more than engineers. And I know people who live in or near Toronto. Personally I cannot imagine why anyone would want to live in Toronto given the cost per square foot of living space relative to earnings for most people.

It is apparent that neither one can actually make the other either move or take out a mortgage and "death sentence" is so drama queen when they can always sell the thing again if they decide to.

Mostly I try to stay out of other peoples living arrangements and marriages. In my entire life I have rarely had other people approve of either although there were real reasons for my choices at the time.


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## cowboyhermit (Nov 10, 2012)

boomer said:


> It is apparent that neither one can actually make the other either move or take out a mortgage and "death sentence" is so drama queen when they can always sell the thing again if they decide to.


Unless you are the one holding the potato when the bubble bursts


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## BillS (May 30, 2011)

I'd bite the bullet and just buy a bigger house. For a guy who was financially cautious he screwed up. The houses went up in value while he was trying to save up a bigger down payment. He should have just bought and made extra mortgage payments later. 

He needs to have a fixed rate mortgage. Having an adjustable rate mortgage is financial suicide.

I wouldn't buy outside of Toronto. Having a one hour commute each way is for idiots. Especially if you have a job where you're working 50 hours a week. I wouldn't be willing to sacrifice the family time. You have to wonder about the divorce rate for couples that are apart that much.

I'd also wonder how often his wife decides she wants something and she doesn't care how they get it. Unless this was a one-time thing, she needs to grow up.


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## Country Living (Dec 15, 2009)

Years ago a man felt his family deserved a bigger and nicer house in a nice neighborhood in the big city. The purchase price was a stretch; however, a friend of his also purchased a house in that same neighborhood so it must be OK to do so. It made no difference the second person had a good paying job with a steady paycheck and no debt except for the house payment. The first man was a mechanic in a small shop and worked on commission. 

Now that the man and his family had a new house, they went shopping for all new furniture because the old furniture just wouldn't do. Oh, and there was the new Suburban in their driveway.

I move into the subdivision a few years later (this was long before I retired and we moved to the ranch) and he was one of the first people I met. Nice guy. He was so proud to have nice house in a nice neighborhood and new furniture and he just replaced the "old" Suburban with a new one (rolled the balance on the old SUV into the purchase price of the new one). He said he was lucky his paychecks covered the monthly payments on everything and everything did have a monthly payment. His wife's job paid for the groceries, utilities, and other daily living expenses.

His hours got cut back. What did he do? Buy a big-screen TV (they were just out) with his income tax refund so he would have something to do now that he had more time at home. Wait for it..... yes, he charged it.

Fast forward two years later. Lost the house. Lost the furnishings. Lost the Suburban. Lost the big screen TV. What lesson did he learn? It was his friend's fault. If his friend had not moved there, he would not felt he deserved to move there also. 

As a side note, his wife was happy in their old house with their old car. I don't know what happened to them. I don't know if they stayed together because the financial strain was so bad. it's a story that's repeated in every city in every state. 

We all deserve things. It's what we do to get them that separates us.


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