e_is_hv Posted January 31, 2012 Report Share Posted January 31, 2012 Hi All, I'm just wondering if anyone can offer some advice/their experience on getting a mortgage/buying a home as a PGY 1. My wife is entering law school (not sure how that expense will affect getting a mortgage), and with any CARMS luck at all we will be living in London or Kingston (so not the most expensive places on Earth!). We're currently in Toronto - anyone know of banks to stay away from, or people specifically to see? thanks so much! Best of luck all. Link to comment Share on other sites More sharing options...
cheech10 Posted January 31, 2012 Report Share Posted January 31, 2012 Rules have tightened over the past few years. Expect to need a 5% down payment as an absolute minimum (and it usually cannot be borrowed money, eg from a LOC, although there are ways around it), and you won't be able to borrow much on a PGY-1 salary of $50,000, particularly if you have any student debt. Don't forget CMHC insurance and other closing costs, which have to be paid out of pocket as well. A rough estimate that you might qualify for as a PGY-1 in Ontario, if you have no debt and no other income, would be a $250,000 home with a $12,500 downpayment. Don't know if your wife's tuition would be considered in the application (but you should consider it when assessing your ability to pay the mortgage). Your best source of info would be your bank, that you have a history with, and might be able to justify your situation to the underwriters. Colleagues of mine have also had success with mortgage brokers, like Monster Mortgage. Finally, are you sure you want to buy a house? There's a lot of downside risk right now since housing costs are at an all-time high and interest rates are at all-time lows. If either or both move toward historical averages, you could find it very difficult to stay solvent. Link to comment Share on other sites More sharing options...
NLengr Posted February 1, 2012 Report Share Posted February 1, 2012 That's why it's smart to lock your interest rate in for the duration of residency right now. Link to comment Share on other sites More sharing options...
Jochi1543 Posted February 1, 2012 Report Share Posted February 1, 2012 I recall someone posting on the forums a few years ago about buying a home in residency - they submitted some sort of special consideration request letter basically saying "I know I only make $60K now, but I'll be making 4x that a year from now" - they ended up getting approved. I guess it also depends on your aspirations for your future home - if you want a McMansion, you might be better off just waiting til one of you makes a full-fledged Dr or lawyer salary. Otherwise, you'd be settling for a cheaper home and then having to move again in a few years. Even if you are granted a bigger mortgage than a random person making $50K a year with no prospect of significantly increasing that salary, you still have to be able to afford payments on that mortgage until you start making a full Dr salary. Link to comment Share on other sites More sharing options...
ch3wbacca1991 Posted February 4, 2012 Report Share Posted February 4, 2012 There's likely a Canadian real estate bubble and a correction in the horizen. It would probably be a good idea to delay your purchase 6 to 12 months from now and see what the market is like. Link to comment Share on other sites More sharing options...
NLengr Posted February 4, 2012 Report Share Posted February 4, 2012 There's likely a Canadian real estate bubble and a correction in the horizen. It would probably be a good idea to delay your purchase 6 to 12 months from now and see what the market is like. I would day this is also slightly dependent on the area of the country. If there is a correction, it will take longer than 12 months to run it's course. Link to comment Share on other sites More sharing options...
mavrik13 Posted February 4, 2012 Report Share Posted February 4, 2012 There's likely a Canadian real estate bubble and a correction in the horizen. It would probably be a good idea to delay your purchase 6 to 12 months from now and see what the market is like. People have been saying that for close to a decade now. Any particular reason you believe we're closer to a correction now than we were then? I can see some areas being subject to a correction (e.g. Toronto condo market... eventually the supply must outweigh the demand, right?), but otherwise? I have no idea. Link to comment Share on other sites More sharing options...
moo Posted February 4, 2012 Report Share Posted February 4, 2012 Very difficult to buy during residency for me with all my loans. I paid off about 25K in government student loans during residency and it was very hard to save, although I was able to save about 10K after the end of 2 years of FM residency, which is not enough to afford even a condo in Vancouver. If you are a full fledged doctor, you will be saving money quickly (assuming your lifestyle won't change much), so even in overpriced markets like Vancouver, you should be able to afford a nice house in a nice area within 2-3 years (even for me I had huge loans to pay off as I studied in the US). All it takes is good financial planning and not splurging on everything in sight. Link to comment Share on other sites More sharing options...
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