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What is stopping you from buying a Toronto or Vaughan property? Pro help — Real Estate Agent Toronto

What is stopping you from buying a Toronto or Vaughan property?

March 29, 2015

Mortgage rateFor most people, there is more than one reason that prevents them from buying a home, a condo, or an investment property. I certainly would not be the first realtor to suggest that price is an often-cited reason for not buying real estate. And I agree completely, the right price is extremely important. I hear stories about people who were able to buy at the right price, and I know from experience how great it can feel to get a great price for a great piece of property.

However, it is important to remember that each ‘feel good’ story also has a but…to it. Remember that many of those stories come from four, five, even six years ago. This means that the property was more affordable. Everything has since gone up, gas, food, taxes, and yes property as well. That should not be a surprise. We have seen prices increase in the greater Toronto area and we expect this to continue.

People are often fascinated by the overall price that they are paying for their home. Even though overall price is important, I personally believe that mortgage rates are far more important considerations. After all, this is what determines the monthly payment that you are going to make.

An example of monthly payment and price
In 2007, a mortgage at a fixed rate was available for 40 years. In a 2012 mortgage, amortization was 30 years. To make the situation easier and to ensure that we started with an even situation, I did not calculate numbers that involved a down payment. A down payment could change the number a little, but it does not change the overall concept.

As you can see below, after paying a higher price but with better rates, after only three years, the person with a better rate has more money in equity/principle, but the monthly payment differs $111. Banks do not really like to educate consumers. That is why banks almost never lose.

This is why you need an experienced real estate agent who is able to crunch the numbers for you and can help come up with some creative ways to buy your property. I can help show you things that your bank will not.

For more information you can call me right now: 416-825-7888 or email angela@azgta.com

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