Author Topic: Coworker bought a house  (Read 3180 times)

Goldy

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Coworker bought a house
« on: August 25, 2016, 05:38:48 PM »
My coworker was telling me he just bought a house in Canada and since he only had 15% he had to pay for mortgage insurance.  In the states PMI is a monthly charge but apparently in Canada it's a lump charge and his was 8,000!!!  Then he said there was a land transfer fee of 5k so he is out 13k right off the bat.  But it's ok, he got to roll that into his loan...

He did say he is happy to be owning again and not pissing away money renting...

meghan88

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Re: Coworker bought a house
« Reply #1 on: August 25, 2016, 06:54:36 PM »
Yep, there are some strange and wonderful rules up here, mostly on the tax side.  For example, mortgage interest is not tax deductible on primary residences.  There are also new taxes for non-residents who purchase homes in Vancouver.  It's all aimed at making sure that people can afford what they're buying so that there are no meltdowns when/if the bubble bursts.

RetiredAt63

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Re: Coworker bought a house
« Reply #2 on: August 26, 2016, 06:57:40 AM »
Yep, there are some strange and wonderful rules up here, mostly on the tax side.  For example, mortgage interest is not tax deductible on primary residences.  There are also new taxes for non-residents who purchase homes in Vancouver.  It's all aimed at making sure that people can afford what they're buying so that there are no meltdowns when/if the bubble bursts.
Here the principle residence is supposed to be a place to live, not an investment, so no capital gains or losses when you sell.  You can always borrow against your mortgage to invest if you really want to, and then that interest is a tax deduction.  Same with borrowing for an RRSP, the interest is not tax deductible.  Secondary residences are like any other investment.  "General wisdom" is to have the 20% down payment if at all possible so no CMHC issues.  In pricey markets (i.e. Toronto) this is not often possible, but I have never put less than 20% down. 

Basically our rules are different enough that there is no point looking at specific financial advice from the US.  Principles, yes, but specifics, no.

Goldielocks

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Re: Coworker bought a house
« Reply #3 on: August 26, 2016, 05:53:41 PM »
Ha! But You forgot not buying points to get a mortgage.  Just pay for legal and property set up fees, which are modest.  Unlike the US, where you can spend $13k on closing costs (related to financing and title insurance, etc.)

There are a lot more differences than you realize, until you experience trying to buy property in both jurisdictions.