B.C. Government to offer downpayment loans for first-time home-buyers

[rubecube]

Also, how many people are pre-approved for a $750,000? Even if I doubled my income, the max I'd be approved for is $450k, so how does this actually help people in cities like Victoria and Vancouver, especially those looking to start a family?

[OMG!WTF!]

Originally Posted by rubecube

Also, how many people are pre-approved for a $750,000? Even if I doubled my income, the max I'd be approved for is $450k, so how does this actually help people in cities like Victoria and Vancouver, especially those looking to start a family?

You don't have to buy a $750k house. It's a 5% loan on whatever you buy. I mean it won't help people looking in Vancouver but then again it won't rekindle that manic market either. I don't see this driving prices artificially in balanced, smaller markets...the rest of BC.

[squiggs96]

Originally Posted by OMG!WTF!

You don't have to buy a $750k house. It's a 5% loan on whatever you buy. I mean it won't help people looking in Vancouver but then again it won't rekindle that manic market either. I don't see this driving prices artificially in balanced, smaller markets...the rest of BC.

As stated earlier, there are thousands of homes under $750,000 in Vancouver.

[llwhiteoutll]

Originally Posted by TorqueDog

• The home must have a purchase price of less than $750,000.
Okay, well clearly this means buying in Vancouver is out.

• The combined gross household income of all people on title must not be more than $150,000.
Who the hell is buying a home valued as high as $750,000 with a combined gross income of $150,000 or less? Can you afford it? Sure. Should you spend that kind of money on a home with only $150k in gross yearly income? Probably not.

There are plenty of stupid people in the world who have no concept of finances.

[rubecube]

Originally Posted by OMG!WTF!

You don't have to buy a $750k house. It's a 5% loan on whatever you buy. I mean it won't help people looking in Vancouver but then again it won't rekindle that manic market either. I don't see this driving prices artificially in balanced, smaller markets...the rest of BC.

Right, but I don't to buy a single, detached home. I'm not planning on having kids. This program actually benefits someone like me because I could easily move into a $450k condo in not much time. The problem is that programs surrounding housing shouldn't be benefiting people like me. It's basically encouraging me to be a DINK.

[OMG!WTF!]

I always thought Toronto was the center of the universe. Is Vancouver the only place to buy a house in BC? They got a foreign buyer tax. Maybe this could help other people in other places. 750k gets you an average house in Victoria. Same with Kelowna though that's a bit skewed by resort properties. Whistler is out. How about Merritt?

I think it's more of a reaction to the no down payment style bonanza they had in the states. This isn't that.

[rubecube]

Originally Posted by OMG!WTF!

I always thought Toronto was the center of the universe. Is Vancouver the only place to buy a house in BC? They got a foreign buyer tax. Maybe this could help other people in other places. 750k gets you an average house in Victoria. Same with Kelowna though that's a bit skewed by resort properties. Whistler is out. How about Merritt?

I think it's more of a reaction to the no down payment style bonanza they had in the states. This isn't that.

If you're a white-collar worker, yeah, Vancouver and Victoria are pretty much it. You have the odd regional government offices in various parts of the province, but what you're saying is would be like me telling laid off middle-managers in the oil industry to try their luck in Brooks.

[rubecube]

I also think the idea that "Well we'll only match what they've already saved up, so then there's no risk" is completely ridiculous. The interest free period is 5 years, so if it took you 10 years to save your first $20k, I'm supposed to be confident you can pay off the next $20k in five? Plus, any idiot can inherit or come into $20k by accident. It doesn't prove they have the capabilities to save that money.

[OMG!WTF!]

If I understand it correctly buyers have to qualify for the whole mortgage amount anyway so this is not outside the bounds of what people can already get. What this does is give people a chance at saving five years of interest on a portion of their loan. That adds up to a substantial amount, over 5k in interest payments at best. If they don't pay a cent back in five years it just becomes a loan they've already qualified for and are capable of paying. They're not being set up to fail by getting in over their head.

I'm sure most first time buyers borrow from their parents anyway. Maybe they're totally incapable of saving anything at all. But they are capable of making monthly payments just like everyone else. The penalty for not paying back your rrsp home loan on time is far greater.

So it's not going to work in Vancouver and Whistler. I don't think it's realistic to expect it to. Short of knocking a million bucks off the price of an average house in Vancouver there's not much you can do for first time buyers making 150k a year in that city.

[Fuzz]

It is basically a way of making an ARM, with 5 years interest free, then bam, you have to pay interest on that plus your mortgage. And we all know what ARM's did to the US. This could be really bad in a rising interest rate environment.

[indes]

Damn just bought my house 2 years ago with my own damn money

[Erick Estrada]

Great idea. Given how everyone pays back their student loans I don't see what could go wrong with the government lending out bigger chunks of money for down payments on houses in an already inflated market.

[rubecube]

Originally Posted by malcolmk14

Is it? I wouldn't vote for a government who did something like this!

It's aimed at voters outside of the GVA and CRD. The Liberals were shut out on the Island last election for the most part, and I'd wager most if not all of metro Vancouver will go to the NDP in 2017. If the Liberals want another majority, they're going to have to pander hard to the people in the rest of the province.

[Hack&Lube]

Idiots, to make homes more affordable, create policies to drive down house prices and reduce the speculation market...not fuel the system with more free money and create an artificial boom in house buying which will further dry up supply.

That said, there is some kind of equivalent program here in Alberta. It's the one Polak bought his Truman home from.

[chemgear]

Originally Posted by Hack&Lube

It's the one Polak bought his Truman home from.

The one with the sink boondoggle?

[Flash Walken]

Originally Posted by Hack&Lube

Idiots, to make homes more affordable, create policies to drive down house prices and reduce the speculation market...not fuel the system with more free money and create an artificial boom in house buying which will further dry up supply.

That said, there is some kind of equivalent program here in Alberta. It's the one Polak bought his Truman home from.

The BC liberals cannot afford for the housing market to cool down or they will be in a situation like Alberta is in now. The BC liberals use the massive amounts of revenue they receive from the housing bubble to make it appear like their tax cuts and sell off of profitable crown corporations has been a success even though it has crippled the province's ability to function/govern appropriately.

With the recent third loss at the supreme Court they are now going to have to spend more on education while they are already resorting to selling off valuable parcels of land for peanuts just to come out a few bucks into the black.

There are dark days ahead for this province.

[puckedoff]

^ Sink party Truman. PARTICIPATE!

[Hack&Lube]

Originally Posted by Flash Walken

The BC liberals cannot afford for the housing market to cool down or they will be in a situation like Alberta is in now. The BC liberals use the massive amounts of revenue they receive from the housing bubble to make it appear like their tax cuts and sell off of profitable crown corporations has been a success even though it has crippled the province's ability to function/govern appropriately.

With the recent third loss at the supreme Court they are now going to have to spend more on education while they are already resorting to selling off valuable parcels of land for peanuts just to come out a few bucks into the black.

There are dark days ahead for this province.

So their equivalent to Oil and Gas is collecting revenue from overseas investors rampantly buying up everything in sight and maintaining the hot bubble?

[Flash Walken]

Originally Posted by Hack&Lube

So their equivalent to Oil and Gas is collecting revenue from overseas investors rampantly buying up everything in sight and maintaining the hot bubble?

Yes, this is exactly the scenario.

British Columbia will haul in more tax revenue from the sale of homes this year than its combined revenues from the province’s historical economic foundation of mining, energy, forestry, Crown land tenures and natural gas.

The first fiscal update on this year’s budget, released on Thursday by Finance Minister Mike de Jong, forecasts the property transfer tax will bring $2.2-billion into the treasury, a massive increase from the $1.2-billion predicted in the budget introduced in the spring. Direct revenues from the province’s top five resources are forecast to total $1.8-billion.

The BC Liberals have put all their eggs in one basket while frantically selling off the other baskets to preserve the status quo for the next government.

The Housing Bubble will burst, the NDP will be elected and then will be blamed for the horrific situation the previous government put the province in, but the new government won't have the same levers to address the fiscal imbalance because things like BC Rail (AGT....) will have long been sold off. The only electable course of action at that point will be preserving the new status quo and hoping to prop up home values again, sort of like how Alberta is now fundamentally dependent on the day to day price of oil and gas.

[squiggs96]

Originally Posted by rubecube

I also think the idea that "Well we'll only match what they've already saved up, so then there's no risk" is completely ridiculous. The interest free period is 5 years, so if it took you 10 years to save your first $20k, I'm supposed to be confident you can pay off the next $20k in five? Plus, any idiot can inherit or come into $20k by accident. It doesn't prove they have the capabilities to save that money.

I'm not sure you are looking at the math correctly. Let's suppose you saved up $20,000 in 10 years, as per your example. This amount is in addition to the rent and housing costs you are already paying before becoming a homeowner. If you can do this, it would give me confidence you know how to save some money, and could likely pay me back in the future. Your monthly housing costs once being a homeowner could be very close to what you were paying as a renter. In some cases, it will be less. You will still have the ability to save another $10,000 in the first five years, assuming the same amount is put aside to savings each month, as per your original example.

The $20,000 loan from the government doesn't have to be paid off in the first five years. It can be paid off at any time, but the balance gets paid off in years 6-25, as a 20 year loan. I don't know what the interest rate will be, but let's assume 5%. That $20,000 loan will add $131 per month to your payments, starting in year 6. If it took you 10 years to save $20,000, that's an average of $167 per month. In this case, you are still ahead by $36 per month. If in the first five years you took your $167, saved it, and put that whole amount towards the loan, you would only have $10,000 to pay down. Now the loan only has $67 per month, assuming mortgage financing rules. More frequent compounding would increase this amount.
ese payments could be less than your