Personal Finance

Montreal, QC Mortgage of 333k with low saving?

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  • May 8th, 2015 8:27 am
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[OP]
Member
Mar 3, 2012
259 posts
127 upvotes
Montreal, QC

Montreal, QC Mortgage of 333k with low saving?

Hi,

long story short,

I have low saving near 17K in bank because I use most of it to help parent with their house and payment (old folks). Now I want to move on. I don't expect them to repay me back. Beside their my parent, I won't ask an penny back from them.

Now I saw I house I want to get. Before tax is 298 000$, after tax around 334K $.
Municipal and school fee maybe around 3000 per years$.

I have an car which is 4 years and 5 month (5 years financing) and close to finish to pay it.

I make about 64K Salary.

I have no debt. Credit rating around 780.

What is the change the bank will gave me an mortgage to cover the cost?
I was planning to pay the 5% down payment and get hit with the insurance fee.

In RBC online mortgage say it's 263K they can give me, but it just use my salary and my expense.

Thanks!
11 replies
Deal Addict
Oct 16, 2007
1107 posts
1493 upvotes
Montr
Well you might get it, but do you really want to be in that kind of situation?
334k mortgage
3k/year taxes
condo fees
car

Don't forget you'll have the transfer tax, the notary fees, movers, etc..


All with 64k salary!
Jr. Member
Nov 20, 2013
145 posts
38 upvotes
Mississauga, ON
Is it a house or a condo that you are buying? If it's a condo I wouldn't do it.
[OP]
Member
Mar 3, 2012
259 posts
127 upvotes
Montreal, QC
Sorry forgot to mention it's an house.
The car payment about 420$ and it's going to finish to pay all in 5 month to pay everything.

How much is transfer tax, notary fee and what ever fee is involve in it?

It's an brand new house.
Deal Expert
Feb 29, 2008
29096 posts
4786 upvotes
Montreal
17k is barely 5% of the purchase price which is the absolute minimum. You mention taxes, so this is a new house? Don't underestimate the costs of buying a new house from a builder. Little things like the numbers on your front door, and big things like landscaping are all future expenses.

The insurance, fee as you mentioned is already an added cost.

I would revise my plan to buy with such a low cash reserve. Maybe get something cheaper, or wait to have more saved up.

Notary fee is 800$ to 1200$ for an existing house, I assume it's less for a pre-built.

Land transfer tax varies from city to city. For montreal it's 0.5% on the first 50k, 1% from 50 to 250, 1.5 for 250 to 500, and 2% for 500k-1000k, 2.5% for above 1 million.

Other cities don't have the tiers above 500k

Where did you get a new house for 333k?
[OP]
Member
Mar 3, 2012
259 posts
127 upvotes
Montreal, QC
I will take an appointment with them and talk and see if can get pre-approval.
I was not looking in downtown Montreal, but mostly on the west island side since that where my family live, and i do not have any issue to take the bus or metro to go work.
For new construction, and 334k with tax in, i don't think i can skip that chance. It's an attached housed though.. I don't mind at all.
Deal Expert
Feb 29, 2008
29096 posts
4786 upvotes
Montreal
deadtorights wrote: I will take an appointment with them and talk and see if can get pre-approval.
I was not looking in downtown Montreal, but mostly on the west island side since that where my family live, and i do not have any issue to take the bus or metro to go work.
For new construction, and 334k with tax in, i don't think i can skip that chance. It's an attached housed though.. I don't mind at all.
If memory serves Pierrefonds and st Genevieve are still in Montreal. The rest are De merged.

Keep another 10k on hand. You will be surprised how fast the expenses of a new house will eat you up.

Don't forget furniture.
Deal Fanatic
Dec 12, 2006
6217 posts
2152 upvotes
calgary
Seems like a very low salary to afford a mortgage that large.

The bank might still give you it though.
Sr. Member
User avatar
May 17, 2012
575 posts
423 upvotes
Montreal
I was in a similar situation 4 years ago when I bought a condo in Montreal, 5% cashdown, around 60k salary. Only difference is I didn't have much money cause I just got our of college and your car payment was a student loan repayment for me (car was old and paid for).

To be honnest, my condo was 230 k$ with minimal condo fees (75$ per month or so), I didn't have a lot of savings at that time and although I didn't have any difficulties living, eating, going out with friends every now and then, I DEFINITELY didn't have much extra $ at the end of the month. And I reallllllly don't consider myself a big spender.

I wouldn't feel comfortable at all buying something 333 k$ on my own with a 60-65 k$ salary and minimal cash down (even with an interest rate of 2.5ish % and regular, monthly payments (no biweekly/aceelerated)). Banks WILL lend you up to 350-375 or maybe even more with good credit, no debts, etc but this doesn't mean you should take it.

But we all have our "trehshold" in terms of what we're comfortable with. I still think it would be too tight.
Deal Fanatic
Dec 11, 2008
7221 posts
3567 upvotes
Montreal
I wouldnt go for that big of a mortgage.
We just bought a house at 340K with taxes, but we're putting 100K in down for a 240K mortgage. Between my fiance and I, we make 95K, and even then, we wouldnt feel comfortable going any higher.
We made our budget, and with our combined salary and this new mortgage, we would be just ok, any more than that and our wallet would feel a bit too light. We are choosing to pay it in 20 years though.
Jr. Member
Nov 20, 2013
145 posts
38 upvotes
Mississauga, ON
I would wait. Real estate is way overpriced these days. Go rent for 1-2 years and see what happens.
Deal Addict
Oct 29, 2010
4396 posts
743 upvotes
If new houses in Montreal are any where near new houses in Ontario, you will need a lot more money in reserve. Here after you sign they drop weird expenses on you. Premium lot fee for example. If your house sits in a better location than the other houses on the street (close to golf course, facing south side, has ravine at the back, farther away from main street etc...) they will ask you to pay more money after you signed up for a price. That premium can be 5k-250k here in Ontario.

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