Real Estate

Condos with 5% Downpayment

  • Last Updated:
  • Oct 1st, 2016 11:12 pm
[OP]
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Jan 3, 2012
1263 posts
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Mississauga

Condos with 5% Downpayment

Hello Everyone,

I have been doing some research about buying a property and since I cannot afford a house and don't have a large down payment, I am going for condos. I want to know if there's any major disadvantage in buying a condo with 5% down payment? For example, if i buy a property near union station for 300K and only put 15K as downpayment, is there something that could seriously go wrong? What are the major disadvantage?

Also, I just found out about this pre-construction condo with only 5% down: http://realestatepartner.ca/daniels-wyatt-condos

Please tell me why I should or shouldn't go for this pre-construction condo?

thanks
35 replies
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Feb 2, 2014
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saadt1988 wrote:
Sep 26th, 2016 11:44 am
Hello Everyone,

I have been doing some research about buying a property and since I cannot afford a house and don't have a large down payment, I am going for condos. I want to know if there's any major disadvantage in buying a condo with 5% down payment? For example, if i buy a property near union station for 300K and only put 15K as downpayment, is there something that could seriously go wrong? What are the major disadvantage?

Also, I just found out about this pre-construction condo with only 5% down: http://realestatepartner.ca/daniels-wyatt-condos

Please tell me why I should or shouldn't go for this pre-construction condo?

thanks
Why not buy resale? This way you only need the 5% down payment and can choose any building you want. Also closing costs will be less.
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
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Sep 29, 2015
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Winnipeg, MB
I agree, have you had a really good look at resale condos?

-With resale, you will GET what you SEE. A pre-construction unit can change during construction (to some extent)
-As well with a resale unit the condo fees should have had a chance to stabilize and you can review the corps financials. A new condo the fee's can be adjusted so as to appear better resulting in large increases later..
-with a preconstruction unit you can be hit with "upgrade" items that will increase the cost. with presale you will likely get better value for your money..
[OP]
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Jan 3, 2012
1263 posts
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CdnRealEstateGuy wrote:
Sep 26th, 2016 12:37 pm
saadt1988 wrote:
Sep 26th, 2016 11:44 am
Hello Everyone,

I have been doing some research about buying a property and since I cannot afford a house and don't have a large down payment, I am going for condos. I want to know if there's any major disadvantage in buying a condo with 5% down payment? For example, if i buy a property near union station for 300K and only put 15K as downpayment, is there something that could seriously go wrong? What are the major disadvantage?

Also, I just found out about this pre-construction condo with only 5% down: http://realestatepartner.ca/daniels-wyatt-condos

Please tell me why I should or shouldn't go for this pre-construction condo?

thanks
Why not buy resale? This way you only need the 5% down payment and can choose any building you want. Also closing costs will be less.
I heard when pre construction condos are built, their value goes up. Another reason is that this link I posted, it's being built near the eaton centre(great location) and unit starts from low 200's with only 5% down

What do u think?
[OP]
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Jan 3, 2012
1263 posts
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davidmr wrote:
Sep 26th, 2016 12:52 pm
I agree, have you had a really good look at resale condos?

-With resale, you will GET what you SEE. A pre-construction unit can change during construction (to some extent)
-As well with a resale unit the condo fees should have had a chance to stabilize and you can review the corps financials. A new condo the fee's can be adjusted so as to appear better resulting in large increases later..
-with a preconstruction unit you can be hit with "upgrade" items that will increase the cost. with presale you will likely get better value for your money..
Yes I have been looking at both resale and pre-construction condos. What are the chances pre-construction unit can change during construction or i can be hit with new upgrade cost?
[OP]
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Jan 3, 2012
1263 posts
31 upvotes
Mississauga
CdnRealEstateGuy wrote:
Sep 26th, 2016 12:37 pm
saadt1988 wrote:
Sep 26th, 2016 11:44 am
Hello Everyone,

I have been doing some research about buying a property and since I cannot afford a house and don't have a large down payment, I am going for condos. I want to know if there's any major disadvantage in buying a condo with 5% down payment? For example, if i buy a property near union station for 300K and only put 15K as downpayment, is there something that could seriously go wrong? What are the major disadvantage?

Also, I just found out about this pre-construction condo with only 5% down: http://realestatepartner.ca/daniels-wyatt-condos

Please tell me why I should or shouldn't go for this pre-construction condo?

thanks
Why not buy resale? This way you only need the 5% down payment and can choose any building you want. Also closing costs will be less.
Also what are some of the major drawbacks with 5% down? I heard I have to pay CMHC fee and higher interest rate? How much is that going to be roughly? On 300 K condo with 5% down, is it possible to keep my monthly payments (mortgage, utilities, other fees) under 1700$? My major concern is my monthly payments

thanks
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Mar 27, 2004
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saadt1988 wrote:
Sep 26th, 2016 12:59 pm
CdnRealEstateGuy wrote:
Sep 26th, 2016 12:37 pm
saadt1988 wrote:
Sep 26th, 2016 11:44 am
Hello Everyone,

I have been doing some research about buying a property and since I cannot afford a house and don't have a large down payment, I am going for condos. I want to know if there's any major disadvantage in buying a condo with 5% down payment? For example, if i buy a property near union station for 300K and only put 15K as downpayment, is there something that could seriously go wrong? What are the major disadvantage?

Also, I just found out about this pre-construction condo with only 5% down: http://realestatepartner.ca/daniels-wyatt-condos

Please tell me why I should or shouldn't go for this pre-construction condo?

thanks
Why not buy resale? This way you only need the 5% down payment and can choose any building you want. Also closing costs will be less.
I heard when pre construction condos are built, their value goes up. Another reason is that this link I posted, it's being built near the eaton centre(great location) and unit starts from low 200's with only 5% down

What do u think?
how many square feet? they are building condo units smaller and smaller now...2 bedrooms at 600 sq ft..
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saadt1988 wrote:
Sep 26th, 2016 11:44 am
Hello Everyone,

I have been doing some research about buying a property and since I cannot afford a house and don't have a large down payment, I am going for condos. I want to know if there's any major disadvantage in buying a condo with 5% down payment? For example, if i buy a property near union station for 300K and only put 15K as downpayment, is there something that could seriously go wrong? What are the major disadvantage?

Also, I just found out about this pre-construction condo with only 5% down: http://realestatepartner.ca/daniels-wyatt-condos

Please tell me why I should or shouldn't go for this pre-construction condo?

thanks


Don't fall for the sales pitch! Low $200k is just the starting price probably the podium level 370 sqft studios, and the location Dundas east & river st. is not anywhere close to eaton centre, you'll be better off buying resale in Daniels paintbox or greatgulf's pace condos at Dundas/Jarvis, there are also assignments available at the grid condo & Dundas square gardens too in the same area, all three within 5 min walking distance of Dundas subway Stn, Ryerson campus across the street, streetcar at doorstep... I was able to lease out all four of my units at pace 3 - 625 sqft 2 bdrm 2 ba. and 1-570 sqft one bdrm within a single week of taking occupancy, Wyatt is too Far away from the subway and the true downtown core.

However at this stage of the game, if u got the funds I'll be looking at starter detached in Durham or Peel instead of buying downtown condos where the appreciation rate is far lower.

If you intend to flip you gotta pay the full HST as well, so after closing costs , development fees, and HST your low $300K condo could be well into the high $300k, there is also the floor premium usually $1000 per, locker cost, etc, definitely better off buying resale if u ask me!
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Feb 2, 2014
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saadt1988 wrote:
Sep 26th, 2016 1:20 pm
CdnRealEstateGuy wrote:
Sep 26th, 2016 12:37 pm
saadt1988 wrote:
Sep 26th, 2016 11:44 am
Hello Everyone,

I have been doing some research about buying a property and since I cannot afford a house and don't have a large down payment, I am going for condos. I want to know if there's any major disadvantage in buying a condo with 5% down payment? For example, if i buy a property near union station for 300K and only put 15K as downpayment, is there something that could seriously go wrong? What are the major disadvantage?

Also, I just found out about this pre-construction condo with only 5% down: http://realestatepartner.ca/daniels-wyatt-condos

Please tell me why I should or shouldn't go for this pre-construction condo?

thanks
Why not buy resale? This way you only need the 5% down payment and can choose any building you want. Also closing costs will be less.
Also what are some of the major drawbacks with 5% down? I heard I have to pay CMHC fee and higher interest rate? How much is that going to be roughly? On 300 K condo with 5% down, is it possible to keep my monthly payments (mortgage, utilities, other fees) under 1700$? My major concern is my monthly payments

thanks
I think you should talk to a professional since you're a first-time homebuyer.

If you only have 5% to put down, you will have to pay the same percentage for CMHC insurance regardless if it's resale or new development. The premium is 3.60% of the mortgage amount (about $10k for your example).

If anything, mortgage rates are lower for insured deals.

Your mortgage payment, condo payment, utility bill and property tax payment will be around $1700.
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
[OP]
Deal Addict
Jan 3, 2012
1263 posts
31 upvotes
Mississauga
CdnRealEstateGuy wrote:
Sep 26th, 2016 10:26 pm
saadt1988 wrote:
Sep 26th, 2016 1:20 pm
CdnRealEstateGuy wrote:
Sep 26th, 2016 12:37 pm


Why not buy resale? This way you only need the 5% down payment and can choose any building you want. Also closing costs will be less.
Also what are some of the major drawbacks with 5% down? I heard I have to pay CMHC fee and higher interest rate? How much is that going to be roughly? On 300 K condo with 5% down, is it possible to keep my monthly payments (mortgage, utilities, other fees) under 1700$? My major concern is my monthly payments

thanks
I think you should talk to a professional since you're a first-time homebuyer.

If you only have 5% to put down, you will have to pay the same percentage for CMHC insurance regardless if it's resale or new development. The premium is 3.60% of the mortgage amount (about $10k for your example).

If anything, mortgage rates are lower for insured deals.

Your mortgage payment, condo payment, utility bill and property tax payment will be around $1700.
I should be able to afford $1700 a month. Which professional would you suggest?

thanks
[OP]
Deal Addict
Jan 3, 2012
1263 posts
31 upvotes
Mississauga
Afv1234 wrote:
Sep 26th, 2016 7:35 pm
saadt1988 wrote:
Sep 26th, 2016 11:44 am
Hello Everyone,

I have been doing some research about buying a property and since I cannot afford a house and don't have a large down payment, I am going for condos. I want to know if there's any major disadvantage in buying a condo with 5% down payment? For example, if i buy a property near union station for 300K and only put 15K as downpayment, is there something that could seriously go wrong? What are the major disadvantage?

Also, I just found out about this pre-construction condo with only 5% down: http://realestatepartner.ca/daniels-wyatt-condos

Please tell me why I should or shouldn't go for this pre-construction condo?

thanks


Don't fall for the sales pitch! Low $200k is just the starting price probably the podium level 370 sqft studios, and the location Dundas east & river st. is not anywhere close to eaton centre, you'll be better off buying resale in Daniels paintbox or greatgulf's pace condos at Dundas/Jarvis, there are also assignments available at the grid condo & Dundas square gardens too in the same area, all three within 5 min walking distance of Dundas subway Stn, Ryerson campus across the street, streetcar at doorstep... I was able to lease out all four of my units at pace 3 - 625 sqft 2 bdrm 2 ba. and 1-570 sqft one bdrm within a single week of taking occupancy, Wyatt is too Far away from the subway and the true downtown core.

However at this stage of the game, if u got the funds I'll be looking at starter detached in Durham or Peel instead of buying downtown condos where the appreciation rate is far lower.

If you intend to flip you gotta pay the full HST as well, so after closing costs , development fees, and HST your low $300K condo could be well into the high $300k, there is also the floor premium usually $1000 per, locker cost, etc, definitely better off buying resale if u ask me!
thanks for the information, i'll research more on resale condos now
[OP]
Deal Addict
Jan 3, 2012
1263 posts
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Mississauga
oasis100 wrote:
Sep 26th, 2016 4:59 pm
saadt1988 wrote:
Sep 26th, 2016 12:59 pm
CdnRealEstateGuy wrote:
Sep 26th, 2016 12:37 pm


Why not buy resale? This way you only need the 5% down payment and can choose any building you want. Also closing costs will be less.
I heard when pre construction condos are built, their value goes up. Another reason is that this link I posted, it's being built near the eaton centre(great location) and unit starts from low 200's with only 5% down

What do u think?
how many square feet? they are building condo units smaller and smaller now...2 bedrooms at 600 sq ft..
SQF doesnt bother me too much cause i'll be living alone. I would prefer 1 + 1 bedroom though
Penalty Box
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Jul 11, 2008
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I looked at this condo as well and my only concern is location, but there are plans for DRL subway line across this area which could be big.

because this is part of regent park revitalization, they offer 'boost' ? program where they lend you 10% of purchase price interest and payment free if you're first time home buyer and household income is below 88k? ; there are some catches though when you sell.

if they sell at 550$/sqft, 1+1 would be like 300kish. maybe 550-600 sqft.

Also, if you get a realtor, there will be realtors who will offer cashback. maybe like 1% of price. easy to find. there's literally almost no work for realtor for precon anyways.
there should be a cap on development levies, can always ask to cap other things on contract as well.

I think all precon in regent park will be available for 5% down because of revitalization plans.
..
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Feb 23, 2004
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My opinion ...If you are two people you need at least 1000sqf....otherwise it's like living in a jail cell.
if you are only yourself 750 sq feet is good enough.
Penalty Box
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Jul 11, 2008
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Away from RFD idiots
redflagdealboy1 wrote:
Sep 28th, 2016 4:01 am
My opinion ...If you are two people you need at least 1000sqf....otherwise it's like living in a jail cell.
if you are only yourself 750 sq feet is good enough.
750 sqft for living alone? are you kidding?

then you need a penthouse for a family? lol
..

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