Can someone give me advice and guidance on buying a condo?

There are countless mortgage calculators. Google is good for this.

5% of what? $200k? $300k? $500k?

You have to tell us the price of the condo if you want anyone to answer your question. If also have to take into account the maintenance fees for the condo.

There's nothing wrong with renting to save money and buy something when you can afford it.

If you can only pay %5 down then you can't afford it imo, and based on your post you don't sound ready to be an owner anyway

The whole "at least my rent money is going somewhere" argument is a fallacy. Affordability aside, if you're making this argument what you need to do is compare the cost you'll pay for rent with the cost you'll pay for housing, excluding your mortgage principal. These costs can be significant. You'll want to include items like mortgage interest, CMHC fees, closing costs, property tax, utilities (water, electricity, gas - if not included in condo fees), condo fees, special assessments, and any required maintenance.

I think affordability is a very personal decision, and am not a fan of the "rules" that people come up with. But, you don't want to end up "house poor" with a 25 year commitment. If you'd like to post your salary and desired condo price, people can probably give you some subjective advice; otherwise, take a look at a mortgage payment calculator and add up all of the costs I mentioned above. If owning a condo is going to eat up all of your income you have to ask yourself if it's worth it. Remember, there are many costs that go along with home ownership that don't increase your net worth.

Nukey wrote: ↑The whole "at least my rent money is going somewhere" argument is a fallacy. Affordability aside, if you're making this argument what you need to do is compare the cost you'll pay for rent with the cost you'll pay for housing, excluding your mortgage principal. These costs can be significant. You'll want to include items like mortgage interest, CMHC fees, closing costs, property tax, utilities (water, electricity, gas - if not included in condo fees), condo fees, special assessments, and any required maintenance.

I think affordability is a very personal decision, and am not a fan of the "rules" that people come up with. But, you don't want to end up "house poor" with a 25 year commitment. If you'd like to post your salary and desired condo price, people can probably give you some subjective advice; otherwise, take a look at a mortgage payment calculator and add up all of the costs I mentioned above. If owning a condo is going to eat up all of your income you have to ask yourself if it's worth it. Remember, there are many costs that go along with home ownership that don't increase your net worth.

Ok, thanks for the responses. Sure I'll input my salary and stuff. I don't make much, entry level at the moment so about $2k/month after taxes.
One thing I want to put out there, I'm not buying a condo as an investment to say, I'm more buying it so that I have something under me that is liquid. And it's been a dream of mine for a long time.

I'm looking to buy a cheaper condo, for maybe lets say $200,000-$250,000. The reason this got my interest is I have a friend who told me it's cheaper to own than rent and that I'm wasting my money, which is true. He pays about $900 for his condo a month. I pay around the same for rent that goes in the garbage every month.

What do you guys think?

acg011 wrote: ↑Ok, thanks for the responses. Sure I'll input my salary and stuff. I don't make much, entry level at the moment so about $2k/month after taxes.
One thing I want to put out there, I'm not buying a condo as an investment to say, I'm more buying it so that I have something under me that is liquid. And it's been a dream of mine for a long time.

I'm looking to buy a cheaper condo, for maybe lets say $200,000-$250,000. The reason this got my interest is I have a friend who told me it's cheaper to own than rent and that I'm wasting my money, which is true. He pays about $900 for his condo a month. I pay around the same for rent that goes in the garbage every month.

What do you guys think?

At your salary and minimal downpayment you won't get more than a $100k mortgage

Canada Mortgage and Housing
Condominium Buying Guide
http://www.cmhc-schl.gc.ca/odpub/pdf/63100.pdf

acg011 wrote: ↑Ok, thanks for the responses. Sure I'll input my salary and stuff. I don't make much, entry level at the moment so about $2k/month after taxes.
One thing I want to put out there, I'm not buying a condo as an investment to say, I'm more buying it so that I have something under me that is liquid. And it's been a dream of mine for a long time.

I'm looking to buy a cheaper condo, for maybe lets say $200,000-$250,000. The reason this got my interest is I have a friend who told me it's cheaper to own than rent and that I'm wasting my money, which is true. He pays about $900 for his condo a month. I pay around the same for rent that goes in the garbage every month.

What do you guys think?

I'm on my phone so can't really type anything detailed, but $900 / month is either his mortgage cost alone (excluding all of the other items I mentioned which can add up to just as much) or he had a very substantial down payment. A $200k 2.89% mortgage at 25 years is around $930 / month alone (and interest rates won't stay low forever).

I think you need to create a spreadsheet with all of the associated costs and cushion for unplanned events (e.g. special assessments). Doing so you'll see the ownership costs will be well in excess of $900 on a $200k property, with a low down payment.

With $2k take home pay a very significant proportion of your income would be going to housing.

To be approved for 5% downpayment, you need to have a very high income to cost ratio. And even then it's a gamble as you don't really know if they will accept you for mortgage until you apply for one.
You can only apply for one after you put an offer and it was accepted. That's the situation i had, i had to put my downpayment on the line without knowing if they will approve me for mortgage.
Luckily for me, they accepted our offer with finance condition, so we had a way out if they don't approve us, but the real estate market is so hot now that most sellers don't accept offers with conditions inside.

You will probably need double your income to be approved for 250k mortgage. If on the other hand you were able to get 10% downpayment, your chances of being approved are going to be much better, that's a mistake we didn't do/know before we put an offer, they look at you complexly different if you put 5% or 10% down, i had to get my parents to co-sign for them to approve it and me and my wife together make about 120k (500k mortgage though)

You can't afford anything at that income

I have experience with this, argh!

Make sure you buy from a reputable builder because some condos are pretty poorly constructed, they seem to decline after Year 3. (I guess they got your $ after 3 years?)

At a gross annual income of say around $30-32k... you're TOTAL household expenses can't be much more than around $850 to even be considered for a mortgage with 5% down. So, lets say your condo fees are around $250 (which is really low), taxes around $200 and heating around $50.. that leaves you with a $550 mortgage. Its not going to happen. You need to increase either your down payment (significantly) or your income.

flafson wrote: ↑To be approved for 5% downpayment, you need to have a very high income to cost ratio. And even then it's a gamble as you don't really know if they will accept you for mortgage until you apply for one.
You can only apply for one after you put an offer and it was accepted. That's the situation i had, i had to put my downpayment on the line without knowing if they will approve me for mortgage.
Luckily for me, they accepted our offer with finance condition, so we had a way out if they don't approve us, but the real estate market is so hot now that most sellers don't accept offers with conditions inside.

You will probably need double your income to be approved for 250k mortgage. If on the other hand you were able to get 10% downpayment, your chances of being approved are going to be much better, that's a mistake we didn't do/know before we put an offer, they look at you complexly different if you put 5% or 10% down, i had to get my parents to co-sign for them to approve it and me and my wife together make about 120k (500k mortgage though)

Get pre-approved to avoid the above situation... and depending where you live, there are plenty of condos on the market. ALWAYS include the finance clause in your offer especially in your case.