I will be buying a place to live but I have questions...LOTS!

[Mia62]

Ok...we have come to an agreement and monetary issues should be settled within the next month. I will then be looking to buy a place to live so that I am permanently settled. Can anyone help me with advice on the following things??

Pros and Cons of buying a house vs townhouse?

Pros and Cons of cashing in the RRSPs, etc and putting 60% downpayment on the place...
OR
Only putting down 20%, taking advantage of the 4% mortgage rate and investing the rest?

IF I need to invest money...any tips on what to invest in? I am not one to gamble with the money.

I usually have no more than 2 - maybe 3 - kids with me that I am driving around now. My van is a 2001 Safari van and is paid off...BUT should I trade it in and get something smaller?

 

[LadyG]

I'd get rid of the van and go for a car, unless you need the van for camping or hockey or the like (don't know what your kids are m/f and whether they live wit you so...). Just the savings in gas alone.

BUT..the van is paid for..

 

[April]

I have been told that there is higher resale value in a house as opposed to a townhouse. But you should check with a real estate agent.

IMO, you should do a 60% downpayment. Investing in this market is very risky. If you want to invest, I would suggest either dividen paying stocks, or a money market fund. Again, check with a professional.

With your van, I don't think size is the issue, age is. It's old enough to begin needing major repairs. You might want to consider getting something newer. Again, just my opinion.

 

[Vilac]

Pros and Cons of buying a house vs townhouse?

Pros and Cons of cashing in the RRSPs, etc and putting 60% downpayment on the place...
OR
Only putting down 20%, taking advantage of the 4% mortgage rate and investing the rest?

IF I need to invest money...any tips on what to invest in? I am not one to gamble with the money.

I usually have no more than 2 - maybe 3 - kids with me that I am driving around now. My van is a 2001 Safari van and is paid off...BUT should I trade it in and get something smaller?

1. Resale on a conventional home over a townhouse is better. So...take that into consideration if you're looking at a home that you're not going to live in for the next 20-30 years. If it's a "short term" home, you have to consider what you're going to do with it when you are ready to move.

2. With interest rates as low as they are, you'd be rather foolish to put 60% down on your morgage. They are at 20-30 year lows now. I'd take that money that you have sitting there, and pay off any debt you may have (credit cards, etc) before you consider what to invest in.

3. I'd never be so bold as to suggest what ANYONE ought to invest in. (I also won't tell you what religion to practice, or who to vote for either...so don't take it personal) LOL

4. Don't Trade in your van......sell it yourself. Clean it up..put a sign in it..and move it that way. You'll get more for it than a trade in. And...get yourself into a new vehicle with a 0% interest rate (or some other low rate note) ......some of the 0% rates are good for five years. That's the way to go. (In fact...I just did that myself at the beginning of the year)

Best of luck.
V~

 

[Killswitch]

With interest rates as low as they are now, you would be fiscally iresponsabile to cash in any investments to increase a downpayment.

Adjustable rate mortgages are also a bad idea due to the currently low fixed rates available now.

 

[Mia62]

The problem that I have with buying a house is that I will have a yard that I would be responsible for. I am not that diligent at taking care of lawns and gardens anymore.
I sort of figured with a townhouse, that I would have less yard, if any...and it is better than an apt. I realize that I will have to pay some sort of strata fees, tho, I guess?
I am also debating about a duplex...I am really just looking for something small enough not to overwhelm me but large enough for the kids to room to breathe.

 

[islandman]

Can I rent a room? I need a place to lie low for a couple of years.

 

[TonyG]

Save money and move in with me. We can work on other payment arrangements.

 

[huskie]

Ok...we have come to an agreement and monetary issues should be settled within the next month. I will then be looking to buy a place to live so that I am permanently settled. Can anyone help me with advice on the following things??

Pros and Cons of buying a house vs townhouse? house cost more and more maintance, but privite and better investment; town house cheapper but takes longer to get your return investment wise, not much privicy.


Pros and Cons of cashing in the RRSPs, etc and putting 60% downpayment on the place...
OR
Only putting down 20%, taking advantage of the 4% mortgage rate and investing the rest?

it all depends on your out look as work goes and retirment


IF I need to invest money...any tips on what to invest in? I am not one to gamble with the money. ...[/COLOR] see above best to invest in older stronger, normal companies (that there stocks have been beaten down) like Disney, Coke and stuff like that or put it in some kind of mutal find



I usually have no more than 2 - maybe 3 - kids with me that I am driving around now. My van is a 2001 Safari van and is paid off...BUT should I trade it in and get something smaller? not unless you can get a lot better gas mialage with a new one, and have little to no more payments.

 

[islandman]

Save money and move in with me. We can work on other payment arrangements.

Aren't you a Mummer, and a guy?

 

[curious2c]

Hmmm...if you are planning on settling in the U.S. then I could give some advice...if you are outside the U.S. anything I would have to offer would be in the blind dark since I do not know how tax codes in other countries are or what you would be facing as far as using retirement savings for house purchase


I will say this:

Assuming a U.S. living.

1. House vs townhouse...Most townhouses have rules sort of like condos. You must abide by them. some limits are more than I would want to live with. I would reccomend a house seperate from neighbors.

2. 'teh larger downpayment woudl be nice in the respect that your payments may be somewaht smaller...there is a division of return that way though since it will only carry the payment doan so far. I would opt for the lower interest and mortage . reinvesting the rrsp into stocks, bonds and/or mutual funds.

3. investing tips...First and foremost...invest through a reputiable firm...wether on line or in a building...make sure they are known. Secondly, invest in companies (stocks) that are growing, and have a good trade volume. A brokers recomendation is not always the way to go. Large firms give security (to a certain extent) where small firms are growing at a faster pace and may have higher returns. Stay away from penny stocks, unless you really know your stuff. I would really push you towards mutual funds that speciallize in certain areas of the economy. Look over their information, ask questions, then invest in several. This way the pros will be handling the big detail things for you. Watch for funds that are 'no-load' rare now days, but good return usually.

How old are the kids? Perhaps trade into a different vehicle that allows for 'growth' and then you won't be cramped with large teenagers in small cars for trips.

Try to avoid debt as much as possible. Debt will take most people down, especially credit card debt. At least with a home mortage there is value that should, if all things work right, appreciate with time.

 

[Mia62]

Can I rent a room? I need a place to lie low for a couple of years.

I am not sure if you could afford the rent.

TonyG...my favourite man in a crisis.

 

[islandman]

I am not sure if you could afford the rent.

Fair enough.

 

[Mia62]

Fair enough.

Mind you...if your girlfriend promises to bring up cases of wine when she visits...then we may be able to work out a deal.

 

[islandman]

Mind you...if your girlfriend promises to bring up cases of wine when she visits...then we may be able to work out a deal.

I don't want to be around when that happens. <chuckle>

 

[LadyG]

Why not just buy a condo if you're on your own? ( again, I don't know if you have custody or not)

And again, depends on the kid's ages too. Do they need a backyard to play in or are they teenagers that are coming and going?

Nothing wrong with townhouses, you have the luxury of a management company to do the big stuff like lawns and all.

As for privacy, how are they not?

 

[Lancecastor]

Pros and Cons of cashing in the RRSPs, etc and putting 60% downpayment on the place...

Look into self directed RSP's and the RevCan rules that allow you to lend yourself money from your RSP to buy a house.

You'll want to buy a different vehicle as an expression of your new freedom. Try to avoid doing so until after you're in your new home and have a monthly budget in place that you're comfortable with. If that's too much to stand, get something red, fast and impractical.

Buy a home with a low maintenance exterior near schools...small yard, vinyl siding....but avoid condos, as you have no control over maintenance fees and special assessments for leaking roofs etc....as you know, your city is full of shoddy condos that were built fast and cheap and become horror stories later $$$ wise.

 

[Mia62]

I don't want to be around when that happens. <chuckle>

Chicken. ;-)

 

[huskie]

Nothing wrong with townhouses, you have the luxury of a management company to do the big stuff like lawns and all.

cause lawn work is fun.

As for privacy, how are they not? You must kinda quite in bed???? Darn.......

 

[Mia62]

Re: Re: I will be buying a place to live but I have questions...LOTS!

Look into self directed RSP's and the RevCan rules that allow you to lend yourself money from your RSP to buy a house.

This is actually what my realtor told me as well.

Mind you...I need someone to break it down into Miaspeak first.

 

[LadyG]

Same thing applies to an apartment or if you leave your windows open

And I'm not going there Huskie but good try !! LOL

 

[islandman]

Chicken. ;-)

Indeed, but a live one.

 

[Lancecastor]

Re: Re: Re: I will be buying a place to live but I have questions...LOTS!

This is actually what my realtor told me as well.

Mind you...I need someone to break it down into Miaspeak first.

Go see a C.A. after first reading about it on the gov.ca website or in pamphlets from your bank.

How's that?

 

[huskie]

Same thing applies to an apartment or if you leave your windows open

And I'm not going there Huskie but good try !! LOL

Oh come on!!!! Don't be a PUSSY!!! Tell us!!

 

[ExLimey]

Things to keep in mind (not necessarily answers to your questions)


Whatever you decide to buy, have it inspected. Some people assume this is what the appraisal is. It is not. The inspector will give you a report all aspects of the house and some even give estimated cost of fixing the problems. They can test septics, water quality etc etc. You pay them, so they work for you. The realtor ultimately gets paid by the seller, so just keep that in the back of your head.

Look into the cost of utilities. Find out from the seller the average bills. If needed contact the utility companies directly. Of course, your averages could differ, but if there are really high heat bills it may indicate improper insulation.

Most loans that are financed for more than 80% of the appraised value of the home require PMI insurance. This adds to the monthly payment and basically covers the bank in case they have to foreclose and don't get what you owe them when they sell it.

What to invest in depends on how long you don't need the money for. Yes the market is down now, but that means it could be a good time to buy in because everything is so cheap. Diversity is a good key. Talk to a representative and determine how much risk you're willing to take. Then split the money between several funds. The older you are the less risk you want to take because the sooner you'll need the money for retirement.

The van is a 2001? How many miles? How well have you maintained it? How often do you change the oil? How much have you spent on repairs within the last year? One option is to determine how much of a payment you can afford and start to save it now while the van is still in good shape. Drive it until it isn't. By then hopefully you'll have a good sized downpayment. I have a '91 pickup I've had since new. When I bought my Jeep two years ago I kept the truck because it was worth more as an around town, beater vehicle than I could get in trade. I've been religious changing the oil and doing routine maintenance and it's still running well with 145,000 miles on it (better if I could keep it out of the ditches!)

My gut reaction is keep the van until it becomes a problem. Fixing whatever goes wrong is still cheaper than buying a new car.