Thinking of Buying A House For the First Time....

[sweet sparrow]

I have a feeling OP is going to wait at least another few years before buying a home if she thinks it will take another four years before beginning to repair their credit. If there are some nice houses available at $120,000, I don't think a house is out of reach for a monthly salary of $2700. Considering what I started out with and the prices in my area....let's just say if homes were that price here, people would buy five and rent out four.

There was so much demand in our area, we lost four houses to bidding wars and narrowly missed losing this one. The entire process took months and even our realtor gave up on us and told us we'd never find a house in our price range, showing us foreclosures and some really scary homes. After taking on the search process myself, we finally did come across a decent home, in move-in condition, and was in our price range.

Our area, property tax, salary, downpayment, etc. will obviously be slightly different, but relatively the same. Compared to the CIBC.com posted costs, I think ours were much less in an expensive city.

Appraisal: bit more
Home inspection: about right
Property survey: not needed, provided by vendor
Land transfer tax: way, way lower
Legal fees: near the lowest part of the scale for a great lawyer
GST/HST: not applicable
Title insurance: part of the legal fees went to a title search - insurance not opted for
Insurance for high-ratio mortgage: variable
Interest adjustments: variable depending on how long it takes you to move in
Prepaid bills: variable
Home insurance: more
Mortgage life insurance: declined

In a nutshell, I think it's very doable on your salary for the price range you're looking at. You should perhaps talk to the mortgage specialist at a bank or a mortgage broker to know what kind of mortgage and rates will be achievable. They shouldn't pull your credit rating unless you ask them. Good luck!

[tobiwobi]

I declined all mortgage insurance from the bank - usually when they have you in to sign your mortgage, they will try to pressure you into tacking on a relatively small monthly charge for mortgage insurance. I declined mostly because I was annoyed that the Scotia guy was spending more time trying to upsell insurance than explaining my mortgage product which I was obviously there for in the 1st place, and not to listen to some insurance sales pitch. Turns out there are issues with mortgage insurance products, such as post claim underwriting and the fact that you continue to pay the same for insurance, but as you are paying off your mortgage, effectively your premium decreases, so you are paying for less and less in value. So I advise you to question all products they are trying to sign you up for. I find that, once you decide to shell out all that cash for a house, there's a whole slew of inspectors and bank reps holding their hand out for a couple of hundred bucks here and there.

This is different from the CMHC insurance that's mandatory if you have less than 20% downpayment.

I went through a mortgage broker that was recommended to me by my coworker, and I have since recommended him to others. I'd suggest to ask around and go through a referral (Not a referral from your real estate agent!! but someone you know who had their own mortgage arranged through this person and was happy).

[anisa]

... There was so much demand in our area, we lost four houses to bidding wars and narrowly missed losing this one. The entire process took months and even our realtor gave up on us and told us we'd never find a house in our price range, showing us foreclosures and some really scary homes. After taking on the search process myself, we finally did come across a decent home, in move-in condition, and was in our price range....

some realtors play that game where they show you the crappiest options in your price range, and then show you a few decent ones that just happen to be about 50,000 more. hmmm.

we had a realtor who was a relative of a friend. he took me out twice to show me houses. on our first meeting he bored us to death with his song and dance about how buying a more expensive house won't cost us more because we can have a longer ammortization. really??

he kept trying to steer me in the direction he wanted by showing crappy houses in the price range we wanted. he even went so far as to try and show me a house that was totally not what we wanted and was much more expensive. i refused to look at it.

i sent him packing, and then we found another realtor through our accountant.

this guy was super nice. relatively new i the field, but he listened to what our wants and needs were. our goals and limitations. found a great house on our second trip out.

stick to your priorities. there are always options out there to suit you and your needs in your price range. you might tweak and adjust the location or age of home or style of home, but that's ok.

don't let a realtor tell you what to do. make him work for his/her commission.

[ex0ticb3lla]

don't let a realtor tell you what to do. make him work for his/her commission.

I so agree with this. We had a fantastic realtor as well (she used to work at a job with my husband and left that job to become a realtor full time). She told us many times over, she didn't mind showing us hundreds upon hundreds of homes, as long as we were comfortable with what we were buying, she was happy. She would give us her suggestions, but always told us that ultimately the decision is ours and we have to be happy and comfortable with what we are buying. It was actually my mother who said "geez, this lady is going to get sick of showing you guys houses all the time" LOL

[MortgageQueen]

I'm not a Realtor. . . . but please do keep in mind everyone still has to make a living. We all need to respect that.

[Brad]

I don't understand why all the replies are so supportive, I think it's dangerous for someone in OP's financial situation to buy a house, they could be ruined for life if something unexpected occurs that requires lots of money. I think a couple that makes $1800/month (is that net or gross?), with a bankruptcy in their past, and can't even scrounge up a 5% downpayment have no business owning a house, at least not until they've saved up a better downpayment. What's so bad about renting, why the hurry into homeownership?

[i_forget]

I have to agree with Brad.

If something goes wrong and I cannot fix it, I know that I have to call in a repair person, and that is going to cost me $100 off the hop for a service call.

It is not cheap maintaining a home, and a home for $120K anywhere in Ontario is going to be needing a LOT of work, so your maintenance costs are going to be high.
Even if your hubby can take care of the work the house needs, he works too, so working on the house and working a job are going to take away from family time....which is not a good thing, especially with young kids (I speak from experience, you can come visit my crap-hole....I bought with the pipe dream of having a young family and a home that is a fixer-upper BIG MISTAKE). PLUS, you have to live in a fixer-upper with small kids (OMG I want to pull my hair out thinking about how hard that was).

Save and save until your financial situation allows you to be in a better position.

[Sunraven]

I thought that 0% down was a thing of the past, and that now you have to have at least 5% down?

[sweet sparrow]

I don't understand why all the replies are so supportive, I think it's dangerous for someone in OP's financial situation to buy a house, they could be ruined for life if something unexpected occurs that requires lots of money. I think a couple that makes $1800/month (is that net or gross?), with a bankruptcy in their past, and can't even scrounge up a 5% downpayment have no business owning a house, at least not until they've saved up a better downpayment. What's so bad about renting, why the hurry into homeownership?

I mentioned that I was assuming OP was going to wait for years. I don't think it hurts to ask questions and talk to mortgage brokers, homeowners, look at homes to see the state of repair, visit open houses (often, these sheets have the annual taxes listed), and gather all the information possible before buying (even if it's many years before - extra info never hurts).

I definitely agree that no one should buy a home right now without a decent downpayment, an emergency fund, as well as a home repair fund (depending on age and state of home).

[marmaduke]

Two things I'd like to say. We have just bought and sold.

1. Our prepaid property tax cost was $3,000 NOT the $500 -600 mentioned in the 3rd post.

2. Buying a house with a 0 down payment means you don' t have any commitment to the the property and I'd be surprised you will get the best rates. A down payment will get you a better mortgage rate. We are going to a smaller (less expensive) home and we are still paying higher interest on the amount that we need (for 2 months) over the 50% of our home value even with a signed offer.

Good luck.

[MortgageQueen]

I think VibrantFlame knows the value of keeping a simple eye. Complicating one's life in such a turbulant time/economy is risky business. Taking the time to "calculate the cost" of an endeavor is crucial. As a "sister" Canuck, I would recommend caution. Home ownership is a gratifying thing, but only to the extent that you can enjoy it with the conditions you live in (i.e. income, expenses)

[Sunraven]

I thought that 0% down was a thing of the past, and that now you have to have at least 5% down?

Found this blog referencing the move by the gov't to disallow 0% down mortgages.

http://mortgagevancouver.wordpress.c...-rule-changes/

OP, one other thing you will need to consider is cmhc insurance costs if you don't have a 20% downpayment.

http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_002.cfm

[MortgageQueen]

Found this blog referencing the move by the gov't to disallow 0% down mortgages.

http://mortgagevancouver.wordpress.c...-rule-changes/

OP, one other thing you will need to consider is cmhc insurance costs if you don't have a 20% downpayment.

http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_002.cfm

0% down is "not yet" a thing of the past. Other Lenders out there are still offering it, but doubtfully for long.

As far as CMHC is concerned, the insrance cost is tacked onto the mortgage amount and is not considered as part of the percentage.

I seriously encourage anyone to save for a downpayment rather then exercise this option. It's much more expensive and remains so, for the whole 5 years.

[Sunraven]

*shaking head*

http://www.canada.com/vancouversun/n...1-15bde77565bf

[Diane de Poitiers]

I mentioned that I was assuming OP was going to wait for years.

I don't know, the OP was talking about the lenders she's found online and their current rates. If she's not looking to buy for a few years, the current mortgage rates are meaningless, since they don't stay the same for years on end. I read her post as her thinking she can buy a house in the near future.

OP, if that's what you're thinking, then you can't, not with a bankruptcy on your credit history, no downpayment and a small income.

If you're planning to wait for the bankruptcy to fall off your credit report, then it's not much use looking at mortgage rates now, since those won't be the same in 4 years. You should use the 4 years to save as much as you can for a downpayment.