What Do You Buy
So you have worked hard and saved up a down payment of $25,000. What do you buy a condo or a house with a suite? Sometimes the decision is an easy one while for some it may not be as obvious.
If you have a specific neighborhood in mind which is high density condo living then you may elect to choose a condo. If, however, you are looking in areas where there is a mix of houses and condo units with a range of price points, then talk to your mortgage broker to compare your options.
For example if you have $25,000 you could put that money down as 10% on a $250,000 condo. Your monthly costs would include a mortgage payment of $1,120 and estimated $300 for strata and $120 for taxes for a total of $1,540.
If you take the same amount of $25,000 and put that down on a purchase of a home with a suite for $425,000 your monthly costs including a mortgage payment of $2,000 and estimated $200 per month property taxes would total $2,200. With suite income from a one bedroom at $700 per month your net cost would be $1,500 per month and you have a property worth $175,000 more for the same investment of $25,000. If you want to go up in price you could use the same $25,000 as 5% down on a home worth up to $500,000. This may get you into a better neighborhood with potential for higher suite income or better appreciation on the value. Note: Due to the price point exceeding $425,000 you would give up your first time buyers exemption on property purchase transfer tax.
You may wonder what kind of house with a suite you can buy for $425,000 – $500,000. There are homes located in the Fraser Valley in very nice communities within this price point. If you prefer the condo lifestyle then go that route. If you thought you could only afford to buy a condo instead of a house, you may want to take a closer look at the numbers. Of course it all depends on the strength of your application (your ability to debt service and your credit history).
So when you ask the question what do you buy a condo or a house with a suite? Now you can answer the question with confidence and make an informed decision.
For more information specific to your situation contact your Dominion Lending Centres mortgage professional.
Thank you to my DLC colleague Pauline Tonkin for this article.