It sounds like we found a very good deal, either that or there's factors yet unseen.

We've been renting for 4 years now; the whole point of buying is to get out of that black hole in which money goes nowhere slowly.

Thanks very much for the feedback.

I'm a tad dubious. 3.49%? That's the same as the best 5-year fixed rate from CIBC. Who's offering that, True North Mortgage? No broker or other admin fees?

Anyhow, the payments on an $80K mortgage over 25 years are $401.36 so that after the first 5 year term, you'll have paid down only $10,918 of it. Aside from the initial land transfer tax of $1600, the principle, interest, taxes and utilities will be about $10,000 a year depending on the property taxes where you live or almost $850 a month.

But there surely would be a mountain of repairs with a place that costs only $160K. I was looking at some in the middle of Saskatchewan last month, and I mean literally in the middle of nowhere. All you could get for that amount was a 1935 shack. Mobiles cost almost that much. You could doubtlessly rent a place for less than $1k. Being without a job is not the time to buy a house, but do as you wish.

Thanks. Since I posted that I heard from a broker and he says it's fairly simple, as long as I put down 50%, as a non-resident i can get a 3.49% mortgage (25 yr) without any proof of income at all!

Go figure.

So why do you say it's not a good time to buy?

You want to buy a house and neither of you has a job? How much rent will you get from the basement of a $160K property? $600/month? And that's taxable income.

It costs a couple a minimum of $40K a year to live in a real, real, cheap house. There are some places that will lend you money without documentation of income if you have an established credit record, but you would have to lie about your income on the application. And that's loan fraud.

Besides, the interest rate and mortgage fee might be prohibitive. But even if it wasn't, now is NOT the time to buy a house. Now is the time to rent, but you'll have problems there too without at least one of you being employed.

Hi

it's been a while since this thread was commented on. I am trying to get a mortgage for a property, worth around $160,000. Trouble is neither my wife nor I are employed (I'm a writer, she's between jobs).

We can put down half that amount on down payment, and our plan is to rent out the house basement to pay the mortgage.

The bank (CIBC) has said No Way. Does anyone know if there are alternate ways to go about this?

No problem. I know no-doc products exist but I just find brokers on the phone are overly optimistic. They make it seem like it is no big deal which would be nice but I'm a little concerned that they are just saying that to get me to commit and then at the last moment turn around and hit me with 4% upfront and double digit interest rates. I've sort of had the experience already where unless I asked specifically they wouldn't even mention that there was an upfront fee -- which is sketchy. Trying to get them to commit to a specific number is difficult as they keep claiming it depends so again I'm worried about getting everything set up and all excited and then at closing have them surprise me. My goal was to maybe get some opinions from brokers who don't have a vested interest. Especially now that the purchase price is going to be double what I wrote in the original post and I'm really stretching the budget to the point where a one or two percent surprise would make it impossible to proceed..

Hey Millie,
Sorry for the delayed response..
I'm not familiar with the no-doc mortgage...

I found this on Industry Canada's website.

moneysearch.ca talks about them having a No-Doc Mortgage.
Self-Employed or on Commission?
Hard to prove your income? Several Canadian lenders now offer no income qualifier, no document (no doc) and alternative documents mortgage products. Call us and we'll walk you through it. A mortgage approval is only a phone call away.
http://www.ic.gc.ca/app/ccc/srch/nvgt.do?sbPrtl=&prtl=1&estblmntNo=234567038031&profile=cmpltPrfl&profileId=501&app=sold&lang=eng

Hey Freddie,
I thought you died in the 90's...
What brings your here from the Philipines?

I don't know how was it in Canada but in the Philippines you can have a high appraisal in that case.

With at least 35% downpayment and your credit score being over 700, you should be able to find a lender who will offer a competitive mortgage rate.