Purchase new Main Residence

[Merriora]

Hello

I`ve left messages both with my current mortgage holder (TD) and a message with Peter Kinch`s Office (Mortgage Broker) to find out my options, but wanted to start a thread to see what others have done and why...

I currently own our home which we were planning to sell in 2 months. However, a friend is selling their home and we have the opportunity to purchase it before it hits the market, thus saving the commission ($15,000) plus they have priced it below market value as they have already purchased a 2nd home.

So, we have access to borrow approx. $80,000 which will allow us to put 20% down payment on the new home while still owning our current home. Our TDS is high due to our high housing costs in Vancouver, so I can`t see it being possible to qualify on our own for the 2nd mortgage. With this in mind, what are our options?

The only option we can think of at this point is to have a family member co-sign on the loan. We will then place our home on the market ASAP, hopefully sell quickly, take a small hit on some carrying costs and then re-pay the $80,000 once everything is finalized.
--- Would it be an easy process to simply take the family member of the loan at this time?
--- Any additional costs associated?
--- Any issues with the above option?

What other options do I have?

Thank You

 

[PeterKinchMortgageTeam]

QUOTE (Merriora @ Jan 23 2008, 10:52 AM) Hello

I`ve left messages both with my current mortgage holder (TD) and a message with Peter Kinch`s Office (Mortgage Broker) to find out my options, but wanted to start a thread to see what others have done and why...

I currently own our home which we were planning to sell in 2 months. However, a friend is selling their home and we have the opportunity to purchase it before it hits the market, thus saving the commission ($15,000) plus they have priced it below market value as they have already purchased a 2nd home.

So, we have access to borrow approx. $80,000 which will allow us to put 20% down payment on the new home while still owning our current home. Our TDS is high due to our high housing costs in Vancouver, so I can`t see it being possible to qualify on our own for the 2nd mortgage. With this in mind, what are our options?

The only option we can think of at this point is to have a family member co-sign on the loan. We will then place our home on the market ASAP, hopefully sell quickly, take a small hit on some carrying costs and then re-pay the $80,000 once everything is finalized.
--- Would it be an easy process to simply take the family member of the loan at this time?
--- Any additional costs associated?
--- Any issues with the above option?

What other options do I have?

Thank You


It really depends on a lot of factors. Are you planning on moving into your friends home or using it as a rental? What is the purhcase price of your friends home?

Generally speaking if you can come up with 25% to put down, the property is in a metropolitan area (assuming greater vancouver here.....), and your credit is good, financing regardless of TDS should not be too much of an issue.

At 20% down, a broker would need to review your application to see if we can get it to qualify. You`d probably want to avoid the co signer route if at all possible - a good broker should be able to let you know pretty quickly.

 

[Merriora]

QUOTE (CanadianMortgageTeam @ Jan 23 2008, 09:35 AM) It really depends on a lot of factors. Are you planning on moving into your friends home or using it as a rental? What is the purhcase price of your friends home?

Generally speaking if you can come up with 25% to put down, the property is in a metropolitan area (assuming greater vancouver here.....), and your credit is good, financing regardless of TDS should not be too much of an issue.

At 20% down, a broker would need to review your application to see if we can get it to qualify. You`d probably want to avoid the co signer route if at all possible - a good broker should be able to let you know pretty quickly.

Hello

Thanks for the reply.

We plan to move into the residene as our main residence and hopefully have our current place sold or on the market and ready for sale. We do not plan to keep our current home as a rental.

Purchase Price: $510,000
1 Bedroom Rental Suite in BSMT: $800/month and the person will sign a new 1-year lease

The place is in Langley.

Once again, thank you for your advice and sorry for contacting your office with such a small time frame on figuring out financing.

 

[Merriora]

QUOTE (CanadianMortgageTeam @ Jan 23 2008, 09:35 AM) ...
Generally speaking if you can come up with 25% to put down, the property is in a metropolitan area (assuming greater vancouver here.....), and your credit is good, financing regardless of TDS should not be too much of an issue.
...

Does it matter where the money comes from in this case?
ie: Could I use a low interest credit card and/or LOC to help raise a down payment?

Thanks,

 

[Merriora]

Special thanks to Rob Macdonald and Jennifer Windsor from Peter Kinch`s office for contacting me on such short notice and getting my application started.

Very much appreciated.