Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post - Why Canada’s economy is headed off the cliff

Cowboy89 · 04-04-2015, 01:37 PM

http://en.wikipedia.org/wiki/Irish_p...File:Fishy.jpg

https://www.vancity.com/Mortgages/Ty...PaymentHelper/

The first link is an advertisement for a Dublin bank in July of 2007 that encourages a 100% mortgage for first time home buyers. Today if you showed that ad to an Irish person, knowing what they now know gleaned from painful first hand experience, they would double face palm.

The second link is to Vancity where they essentially have a program that allows first time buyers to borrow 97.5% of the value of the property they wish to buy. Now sure, the 'soft landing' types will get into an argument of semantics about how underwriting standards are better here than they were in Ireland, that, hey someone who can scrape together 2.5% of a down payment is a better credit risk than someone who has to borrow a full 100%, hey it's insured by the government here in Canada, etc. etc. But the point that actually matters about the two examples is that buying something that costs hundreds of thousands of dollars and many multiples of annual income for 100% or 97.5% or 95% borrowing is generally a stupid risky financial decision. In aggregate, the Americans and the Irish now know this, Canadians do not.

04-04-2015, 01:37 PM	#50
Cowboy89 Franchise Player Join Date: Feb 2006 Location: Toledo OH Exp:	http://en.wikipedia.org/wiki/Irish_p...File:Fishy.jpg https://www.vancity.com/Mortgages/Ty...PaymentHelper/ The first link is an advertisement for a Dublin bank in July of 2007 that encourages a 100% mortgage for first time home buyers. Today if you showed that ad to an Irish person, knowing what they now know gleaned from painful first hand experience, they would double face palm. The second link is to Vancity where they essentially have a program that allows first time buyers to borrow 97.5% of the value of the property they wish to buy. Now sure, the 'soft landing' types will get into an argument of semantics about how underwriting standards are better here than they were in Ireland, that, hey someone who can scrape together 2.5% of a down payment is a better credit risk than someone who has to borrow a full 100%, hey it's insured by the government here in Canada, etc. etc. But the point that actually matters about the two examples is that buying something that costs hundreds of thousands of dollars and many multiples of annual income for 100% or 97.5% or 95% borrowing is generally a stupid risky financial decision. In aggregate, the Americans and the Irish now know this, Canadians do not. Last edited by Cowboy89; 04-04-2015 at 01:53 PM.