Quote:
Originally Posted by maverickstruth
That's always the trick -- I wish I had a crystal ball (don't we all!). To be honest, I don't know if we'd be as eager to leave our current rental situation if not for the major upkeep problems -- only one of which is the rampant mould. We had been putting off purchasing because we *know* that things probably haven't bottomed out yet, but ultimately, we can't stay where we're at, and after playing with the worst-case scenario numbers (have we considered all the 'hidden costs' of ownership? what would happen if we kept renting and invested the difference instead of purchasing? what about moving fees? job security? are we sure we'll stay 5+ years? etc, etc.) it seems like this is our best short- and long-term choice. At the very least, we know that if there's mould, we can take make sure it gets taken care of.
Doesn't mean it's not scary, though, especially since we're taking the plunge for the first time. Having never been in debt -- even for school, we both completed multiple degrees without student loans or assistance from anyone -- those big numbers seem like an awful lot of debt to take on all at once. Thus the much appreciation for all the cautions and advice given thusfar  |
Well you are right, at current prices v. supply it IS a lot of debt!
Without going on about it i would certianly say that if you are buying with at least a modest downpayment and on a 25 year (or less) term it is probably fine to buy.
But if you are buying with zero down and/or over more than 25 years (not to mention 40 years) you are better off renting. (Better than paying even more per month just to rent from the bank!)
In fact the only reason prices have not imploded in Alberta already are 40 year mortgages. 70% of current buyers need more than 25 years and 35% are needing 40 year mortgages. That is scary, and people are just buying more than they should out of desperation not realizing that when this wave is done there is no one left and prices have to fall (or at least stagnate indefinitely).
Claeren.