Over the next month or so you are going to be receiving the necessary documents required to complete your tax returns. For those of you who choose to complete your tax returns on your own I wanted to provide you with the link to TD Waterhouse website that will provide you with a 20% discount on Quick Tax Software. Click on the link or logo below.
Once you have accessed the site, please scroll down to "Taxes Made Easy. Taxes Done Right." Click and follow the instructions.
View of West Vancouver from the Ambleside Park
Lions Gate Bridge and Vancouver's Downtown
This is why I love Vancouver's Winter
The Birds
English Bay
The Cuttest Home Depot I've Ever Seen
British Properties, West Vancouver
Vancouver at Night
Another Reason to Love Vancouver
I'm very happy to be Vancouverian, British Columbian and Canadian. Can you blame me?!
Rent Vs. Buy Scenario for 1st Time Home Buyers
Typical cost to RENT 1 Bed/ 1 Bath, 600 sq.feet Apartment*:
Vancouver $1300
Burnaby/Coquitlam/Port Coquitlam/Port Moody $950
Pitt Meadows/Maple Ridge $900
Langley $850
Surrey $800
Richmond/White Rock $950
*These costs are just average and might be higher or lower depending on various factors.
What you can BUY for $230,000
Vancouver

1 Bed/1 Bath 582 sq.ft.
Burnaby
1 Bed/1 Bath 783 sq.ft.
White Rock

2 Bed/2 Bath 1,136 sq.ft.
Maple Ridge

2 Bed/2 Bath 1,098 sq.ft.
Scenario #1-BUY NOW
Purchase Price: $230,000
Minimum 5% Down Payment: $11,500
CMHC Fee: $6,008
Property Purchase Transfer Tax: $0*
Closing Costs: $0*
Mortgage Amount:$224,508 ($230,000-$11,500(down payment)+$6,008(CMHC fee))
Mortgage Payments at current 5 year term rate of 4.39%, 30 year amortization: $1,117.68
*some conditions apply
Amortization Schedule
|
Comparison #1
After 5 years (based on renting in Vancouver for $1,300)
|
|
Money Thrown Away |
Created Equity |
|
Rent + yearly 3.7% increase |
$80,886 |
$0 |
|
Home Ownership |
$0 |
$20,319.23 |
Many will argue that you waste your money on interest. Assuming this point of view, you're still better off owning than renting because if you ever want to have your own home you'll buy one day and start paying interest anyways.
Comparison #2
Let's call interest payments "Money Thrown Away"
|
|
"Money Thrown Away" |
Created Equity |
|
Rent + yearly 3.7% increase |
$80,886 |
$0 |
|
Home Ownership |
$46,742 |
$20,319.23 |
Scenario #2-BUY LATER
"I wait another year for prices to drop another projected 10% (nobody has a crystal ball)."
More likely interest rates will not stay the same and let's assume 5 year fixed goes up to 6.5%.
New Purchase Price: $207,000
Minimum 5% Down Payment: $10,350
CMHC Fee: $5,407
Property Purchase Transfer Tax: $0*
Closing Costs: $0*
Mortgage Amount: $202,057 ($207,000-$10,350(down payment)+$5,407(CMHC fee))
Mortgage Payments at current 5 year term rate of 6.5%, 30 year amortization: $1,353.43
*some conditions apply
|
Mortgage Amount: |
$202057.00 |
Payments Displayed: |
1 - 60 |
|
Interest Rate: |
6.500% |
Payment Frequency: |
Monthly |
|
Initial Amortization Period: |
25 Years, 0 Months |
Initial Payment: |
$1353.43 |
|
Period |
Total Paid |
Interest |
Principal |
Balance |
|
|
Year 1 |
1 - 12 |
$16241.16 |
$12861.08 |
$3380.08 |
$198676.92 |
|
Year 2 |
13 - 24 |
$16241.16 |
$12637.81 |
$3603.35 |
$195073.57 |
|
Year 3 |
25 - 36 |
$16241.16 |
$12399.81 |
$3841.35 |
$191232.22 |
|
Year 4 |
37 - 48 |
$16241.16 |
$12146.08 |
$4095.08 |
$187137.14 |
|
Year 5 |
49 - 60 |
$16241.16 |
$11875.55 |
$4365.61 |
$182771.53 |
|
Totals: |
$81205.80 |
$61920.33 |
$19285.47 |
Comparison #1
After 5 years (based on renting in Vancouver for $1,300)
|
|
Money Thrown Away |
Created Equity |
|
Rent + yearly 3.7% increase |
$80,886 |
$0 |
|
Home Ownership |
$0 |
$19,285 |
Many will argue that you waste your money on interest. Assuming this point of view, you're still better off owning than renting because if you ever want to have your own home you'll buy one day and start paying interest anyways.
Comparison #2
Let's call interest payments "Money Thrown Away"
|
|
"Money Thrown Away" |
Created Equity |
|
Rent + yearly 3.7% increase |
$80,886 |
$0 |
|
Home Ownership |
$61,920 |
$19,285 |
BUY NOW VS. BUY 1 YEAR LATER ANALYSIS1
|
|
Scenario #1: Buy Now |
Scenario #2: Buy 1 Year Later (10% price drop assumption) |
Gain(+)/Loss(-) |
|
Purchase price |
$230,000 |
$207,000 |
+$23,000 |
|
Mortgage Payments (over 5 year term)2 |
$67,061 |
$81,206 |
-$14,145 |
|
CMHC fee |
$6,008 |
$5,407 |
+$601 |
|
Rent Pmts (during 1st year)3 |
$0 |
$15,600 |
-$15,600 |
|
Rent Pmts Increase (Max 3.7%)4 |
$0 |
$577.200 |
-$577.200 |
|
Total Cost to Buy |
$303,069 |
$309,790.20 |
-$6721.20 |
|
|
|
|
|
2-Interest rate shown is fixed 5 year term rate at 4.39% currently and assumption of 6.5% in future.
3-You still incur rent payments during the year you're waiting for prices to drop more. If you buy now you start paying mortgage payments now which you have to start paying eventually anyways if homeownership is in your plans.
4-Currently allowable maximum rent increase in BC is 3.7%
Conclusion: In particular example your savings (loss) amount to -$6,721.20 assuming interest rate will be 6.5% if you wait another 10.5 months for a projected 10% price drop.Nobody knows what interest rates will be like in a year or how much more prices will drop. Nobody has a crystal ball. I have worked through this scenario to show how much expected price drop will affect your savings. Just remember, interest rates are historically low right now to stimulate and increase consumer's confidence. Once economy stabilizes interest rates will go up and on average they have been around 6.5% in previous years and much higher before.
It's up to you what you do with this information. My job is to inform the public, your job is to make a decision. Happy decision making!
In my future blog post, I will work through the scenarios of getting a mortgage at a variable rate, currently 3.8%, and buying a house with a mortgage helper.
Just another reminder about the First Time Home Buyer Seminar we'll be holding on Monday, Feb 16th at the Maple Ridge Library from 6:30 to 8:30PM. REALTOR, Mortgage Specialist, Home Inspector and NotaryPublic to answer all your questions at one place! Come and join us! Tons of useful information, door prizes, donuts and refreshments! Register today by phone 778.991.3293 or email olena.osipov@remax.net.


2008 Sales Activity For the Community Area of Cottonwood, Maple Ridge, BC
Listings summarized in the following table are based on information from the Greater Vancouver MLSLink Residential. Properties sold were not all listed by RE/MAX ridge-meadows realty and were listed by various MLS participating offices.
|
ATTACHED (Homes)
|
|||||||
|
Price Range $ |
Properties
Sold(#) |
Average List Price($) |
Average Sale Price($) |
Sales Success Ratio(%) |
Average Size (sq.feet) |
Average Beds/Baths (#) |
Average Days on Market(#) |
|
0-300,000 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
300,000-350,000 |
1 |
329,000 |
329,000 |
100 |
1,450 |
2/2 |
10 |
|
350,000-400,000 |
7 |
390,128 |
384,071 |
98 |
1,787 |
3/1 |
55 |
|
400,000-450,000 |
13 |
427,053 |
419,115 |
98 |
2,008 |
3/2 |
89 |
|
450,000-475,000 |
7 |
470,300 |
463,557 |
98 |
2,689 |
3/3 |
119 |
|
475,000-500,000 |
17 |
496,205 |
489,347 |
98 |
2,873 |
3/3 |
115 |
|
500,000-525,000 |
18 |
517,447 |
515,391 |
99 |
2.773 |
4/3 |
137 |
|
525,000-550,000 |
20 |
551,044 |
539,660 |
98 |
3,049 |
4/3 |
45 |
|
550,000-575,000 |
10 |
572,320 |
556,880 |
97 |
3,127 |
4/3 |
57 |
|
575,000-600,000 |
8 |
590,899 |
586,737 |
99 |
3,327 |
5/3 |
63 |
|
600,000-625,000 |
5 |
625,740 |
615,080 |
98 |
2,961 |
4/3 |
49 |
|
625,000-650,000 |
4 |
657,150 |
638,487 |
97 |
3,579 |
4/3 |
22 |
|
650,000-700,000 |
1 |
749,000 |
700,000 |
93 |
2,539 |
3/2 |
44 |
|
700,000-800,000 |
2 |
754,000 |
725,000 |
96 |
3,692 |
4/3 |
37 |
|
|
|
|
|
|
|
|
|
|
DETACHED (Townhomes) |
|||||||
|
0-250,000 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
200,000-250,000 |
2 |
238,700 |
230,000 |
97 |
1,029 |
2/1 |
105 |
|
250,000-275,000 |
15 |
271,865 |
265,300 |
98 |
1,197 |
2/1 |
27 |
|
275,000-300,000 |
13 |
293,288 |
286,038 |
98 |
1,370 |
3/2 |
58 |
|
300,000-325,000 |
19 |
316,942 |
312,305 |
99 |
1,436 |
3/2 |
27 |
|
325,000-350,000 |
21 |
337,218 |
333,209 |
99 |
1,436 |
3/2 |
39 |
|
350,000-375,000 |
6 |
371,733 |
363,983 |
98 |
2,035 |
3/3 |
46 |
|
375,000-400,000 |
20 |
394,192 |
389,802 |
99 |
2,096 |
2/3 |
35 |
|
400,000-425,000 |
14 |
413,692 |
410,428 |
99 |
2,167 |
3/3 |
63 |
|
425,000-450,000 |
5 |
437,900 |
435, 760 |
99 |
2,284 |
3/3 |
34 |
|
450,000-500,000 |
1 |
467,800 |
460,000 |
99 |
3,005 |
4/4 |
42 |
The accuracy of information in this report is dependent on above mentioned MLS system for periods specified and cannot be guaranteed. Some listings may have been marketed previously under a different listing agreement (these are not reflected in days on market). If your property is currently listed with another real estate broker this communication is not a solicitation of the listing.

ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved