And this ^ is what is wrong with Canadian aviationDHC-1 Jockey wrote: ↑Wed May 29, 2019 11:55 am Not to deal with mortgages, but a situation I had almost 10 years ago:
I was offered a job with a reputable Northern Ontario company flying Metro's. I needed to pay a $10,000 bond up front (which I didn't have in my account), so I was told to go to a bank and get a loan. So I go to the bank and ask for the money, and when they want to see my paperwork showing that I have a job (not the job offer contingent on getting the money), I explain that I need the money to "buy" the job. The bank laughed at this and said they wouldn't give me the money until I had a job, and the airline wouldn't give me a job until I had the money. Catch-22.
I ended having to get my wife to co-sign my loan application just so I could get the money to pay my bond. In essence, I couldn't "afford" to buy the job I wanted.
Getting a mortgage as a Pilot
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Re: Getting a mortgage as a Pilot
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Re: Getting a mortgage as a Pilot
The banks don't think beyond their little world. When I applied for a mortgage they said they could give me X amount of $, I said if you give me a bit more I can afford something close to work to avoid commuting therefore saving about $500 a month which in turn could go towards the mortgage. They said they only care about my net income and the amount of my mortgage payment, that's it. Banks and insurance companies are frustrating
- rookiepilot
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Re: Getting a mortgage as a Pilot
This is a bizarre comment.jakeandelwood wrote: ↑Wed May 29, 2019 6:07 pm The banks don't think beyond their little world. When I applied for a mortgage they said they could give me X amount of $, I said if you give me a bit more I can afford something close to work to avoid commuting therefore saving about $500 a month which in turn could go towards the mortgage. They said they only care about my net income and the amount of my mortgage payment, that's it. Banks and insurance companies are frustrating
Of course they don't care. They are in business to make money and manage their risk. They've seen a thousand deadbeat stories. What do you expect?
Re: Getting a mortgage as a Pilot
Lots of great advice here! Most of it is standard knowledge, but then I am over 50 so have had time to hear it before.... Nice to see it so well presented and all in one spot. The career path of a pilot adds its own nuances ie moving, bonds, seasonal jobs, .....
A young fella at work once told me he had recently renegotiated his mortgage and was quite proud to state that he was making monthly payments so that he could put away some extra money each month. I almost fell off of my chair. I asked him about what he was doing to reduce his principal and he asked me what that was..... He had just gone through a meeting with his bank.... I printed off some examples of payment options, ie weekly, biweekly, accelerated bi weekly and how the various payment plans affected his principal, all for the same amount going out the door each month...told him the principal was his enemy and he had to get rid of it as soon as possible. He went back to renegotiate, I think. I was pissed at the bank for allowing him to get into that but then when someone figures they have it all figured out, well...... Do your own research and, as you have done here, ask questions. But because you might not like the answers, ie, you want too much too soon, does not mean it is bad advice.
The point about committing to a house when your career choice means there is a good chance you will be moving in the next few years is an insightful one. The loss/gain will be determined by your term there and the housing market. Is the market increasing? decreasing or plateaued? If it is gaining and you are paying similar payments to rent, then it will be good. Couple of bad luck scenarios, ie furnace, and it could be a negative. And a move on top....
Negatives can be absorbed in the long term, but not so easily in the short term. If you are really handy and can add value through renovations, then buy a well located fixer upper....and make it nice.
Just my 2 cents
Good luck!
A young fella at work once told me he had recently renegotiated his mortgage and was quite proud to state that he was making monthly payments so that he could put away some extra money each month. I almost fell off of my chair. I asked him about what he was doing to reduce his principal and he asked me what that was..... He had just gone through a meeting with his bank.... I printed off some examples of payment options, ie weekly, biweekly, accelerated bi weekly and how the various payment plans affected his principal, all for the same amount going out the door each month...told him the principal was his enemy and he had to get rid of it as soon as possible. He went back to renegotiate, I think. I was pissed at the bank for allowing him to get into that but then when someone figures they have it all figured out, well...... Do your own research and, as you have done here, ask questions. But because you might not like the answers, ie, you want too much too soon, does not mean it is bad advice.
The point about committing to a house when your career choice means there is a good chance you will be moving in the next few years is an insightful one. The loss/gain will be determined by your term there and the housing market. Is the market increasing? decreasing or plateaued? If it is gaining and you are paying similar payments to rent, then it will be good. Couple of bad luck scenarios, ie furnace, and it could be a negative. And a move on top....
Negatives can be absorbed in the long term, but not so easily in the short term. If you are really handy and can add value through renovations, then buy a well located fixer upper....and make it nice.
Just my 2 cents
Good luck!
Re: Getting a mortgage as a Pilot
To share an experience I had- bought a house to flip a while ago. Worked out amazingly to skip some rungs on the ladder.
Didn't get approved at first- Mortgage broker said the lenders didn't like my monthly debt load because of a closed student line of credit from flight school.
Since it "was" an open line of credit initially they kept assessing my monthly payments as what it would be if it were repayed in 3 years, (Their calculation for open loans) even though it had converted to a structured payment spread over a longer period.
Broker wasn't working with me. Tried another, and no dice. I now think most independant ones aren't very effective at all.
I went directly to the bank holding my SLOC, and asked the manager for a written letter attesting to my actual payments. I took that to my home bank, explained it, they actually paid attention, and I had a full mortgage with a surprsingly great rate 30 min later.
Moral is it pays to shop around and negotiate a bit.
Cheers
Didn't get approved at first- Mortgage broker said the lenders didn't like my monthly debt load because of a closed student line of credit from flight school.
Since it "was" an open line of credit initially they kept assessing my monthly payments as what it would be if it were repayed in 3 years, (Their calculation for open loans) even though it had converted to a structured payment spread over a longer period.
Broker wasn't working with me. Tried another, and no dice. I now think most independant ones aren't very effective at all.
I went directly to the bank holding my SLOC, and asked the manager for a written letter attesting to my actual payments. I took that to my home bank, explained it, they actually paid attention, and I had a full mortgage with a surprsingly great rate 30 min later.
Moral is it pays to shop around and negotiate a bit.
Cheers
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Re: Getting a mortgage as a Pilot
I'd like to thank Adam Oke for the time and thought he put into his post on the last page. There is lots of good advice there. It would take some self-discipline, but if you followed that advice you would not regret it.
If I'd known I was going to live this long, I'd have taken better care of myself
Re: Getting a mortgage as a Pilot
Thanks everyone for your input and thanks Adam for taking the time to write all that down.
It seems I've got to agree and just accept the decision by the bank not to give me a mortgage for a big enough amount at the moment. It's frustrating because FYI the rates for getting a mortgage right now (if anyone else is considering it) are very good and because my intention was to get room mates etc so it would be much easier to pay the mortgage than my rent.
It's the old problem of being caught in the poverty trap of paying rent so you cant save to put up more money for the deposit (I can afford 10% now). I guess the only way forward is to wait until I can upgrade and get a salary increase.
Once again thanks everyone for your time.
It seems I've got to agree and just accept the decision by the bank not to give me a mortgage for a big enough amount at the moment. It's frustrating because FYI the rates for getting a mortgage right now (if anyone else is considering it) are very good and because my intention was to get room mates etc so it would be much easier to pay the mortgage than my rent.
It's the old problem of being caught in the poverty trap of paying rent so you cant save to put up more money for the deposit (I can afford 10% now). I guess the only way forward is to wait until I can upgrade and get a salary increase.
Once again thanks everyone for your time.
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Re: Getting a mortgage as a Pilot
I had absolutely no problem getting a mortgage as a pilot. Although my financial situation and planning is very similar to Adam Oke's.
I also don't count per diems as income.
I also don't count per diems as income.
- schnitzel2k3
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Re: Getting a mortgage as a Pilot
Ha yeah that's pretty good. His video on the Pilot shortage is good too.
Re: Getting a mortgage as a Pilot
Have you looked into renting to own? Some owners might be open to it.ehv8oar wrote: ↑Thu May 30, 2019 7:37 am Thanks everyone for your input and thanks Adam for taking the time to write all that down.
It seems I've got to agree and just accept the decision by the bank not to give me a mortgage for a big enough amount at the moment. It's frustrating because FYI the rates for getting a mortgage right now (if anyone else is considering it) are very good and because my intention was to get room mates etc so it would be much easier to pay the mortgage than my rent.
It's the old problem of being caught in the poverty trap of paying rent so you cant save to put up more money for the deposit (I can afford 10% now). I guess the only way forward is to wait until I can upgrade and get a salary increase.
Once again thanks everyone for your time.
What about buying something super tiny? Like a trailer style thingy?
As an AvCanada discussion grows longer:
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship
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Re: Getting a mortgage as a Pilot
B izzare? People expect a bit of common sense from a bank. There are deadbeats that make lots of money and blow most of it and leave their bills unpaid, I know one, owes money all over town, then there are people who make peanuts but they always make sure their IMPORTANT bills are paid, such as a roof over your head. I was simply saying if I save some money over here I can spend it over there even though I still make the same salary, my point is that perdiem money is money made at the original posters job, what difference does it make if it's just part of his salary or a separate perdiem? The banks nitpick over stupid little details when in the end anyone can loose their job the day after they get their mortgage anyway.rookiepilot wrote: ↑Wed May 29, 2019 6:27 pmThis is a bizarre comment.jakeandelwood wrote: ↑Wed May 29, 2019 6:07 pm The banks don't think beyond their little world. When I applied for a mortgage they said they could give me X amount of $, I said if you give me a bit more I can afford something close to work to avoid commuting therefore saving about $500 a month which in turn could go towards the mortgage. They said they only care about my net income and the amount of my mortgage payment, that's it. Banks and insurance companies are frustrating
Of course they don't care. They are in business to make money and manage their risk. They've seen a thousand deadbeat stories. What do you expect?
Re: Getting a mortgage as a Pilot
Per firm is for buying food. How does the bank know you don’t spend it all on food?jakeandelwood wrote: ↑Thu May 30, 2019 1:18 pmB izzare? People expect a bit of common sense from a bank. There are deadbeats that make lots of money and blow most of it and leave their bills unpaid, I know one, owes money all over town, then there are people who make peanuts but they always make sure their IMPORTANT bills are paid, such as a roof over your head. I was simply saying if I save some money over here I can spend it over there even though I still make the same salary, my point is that perdiem money is money made at the original posters job, what difference does it make if it's just part of his salary or a separate perdiem? The banks nitpick over stupid little details when in the end anyone can loose their job the day after they get their mortgage anyway.rookiepilot wrote: ↑Wed May 29, 2019 6:27 pmThis is a bizarre comment.jakeandelwood wrote: ↑Wed May 29, 2019 6:07 pm The banks don't think beyond their little world. When I applied for a mortgage they said they could give me X amount of $, I said if you give me a bit more I can afford something close to work to avoid commuting therefore saving about $500 a month which in turn could go towards the mortgage. They said they only care about my net income and the amount of my mortgage payment, that's it. Banks and insurance companies are frustrating
Of course they don't care. They are in business to make money and manage their risk. They've seen a thousand deadbeat stories. What do you expect?
- rookiepilot
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Re: Getting a mortgage as a Pilot
All I'm saying is it's pure risk management.
Re: Getting a mortgage as a Pilot
Hey digits,Have you looked into renting to own? Some owners might be open to it.
What about buying something super tiny? Like a trailer style thingy?
I have indeed, it's a possibility but it's difficult to find a rent to own, most sellers just want to get the money and move on.
Ha that's pretty much what the mortgage broker said to me, that there's some nice mobile homes out there. Some of them do look pretty good and if it was by itself I would consider it but I dont fancy living in a trailer park.
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Re: Getting a mortgage as a Pilot
Adam Oake corrected me that it's 25 k from your rsp on the first time home buyer, good catch.
Just for the sake of discussion, if you haven't explored this option look at rsp loans. Basically you can borrow to put into your own rsp's but you have to be able to pay the loan back within one year. You can make lump sum payments as well so here's a rough calculation of how it plays out.
The bank loans you 10k to put in an rsp at their institution. They have your money so if you default they are only out the interest. As a result it's a very low interest loan. You pay $833 a month plus a tiny bit of interest but get the tax deferral immediately so in theory you should get somewhere around $2500 back on your taxes which you can then apply to the principle. Now you only owe $7500 on a $10 k loan. It still costs that $833 per month plus interest which now only takes you 9 months to pay off.
If you can build the 25 k each with a partner or spouse, having 50k to put down as a down payment makes you look good, plus borrowing and paying off loans increases your credit score. If you really really really really trust your partner or spouse, one of you can buy rsp's in their name. You get the tax deferral, they get the money in their rsp account. It's risky though, cause if they decide to cash the rsp you have to pay back the tax on it so trust is a really big issue here. Great if one of you makes more money.
Banks also like giving mortgages to married or common law couples because there's two parties they can go after if you default.
Just for the sake of discussion, if you haven't explored this option look at rsp loans. Basically you can borrow to put into your own rsp's but you have to be able to pay the loan back within one year. You can make lump sum payments as well so here's a rough calculation of how it plays out.
The bank loans you 10k to put in an rsp at their institution. They have your money so if you default they are only out the interest. As a result it's a very low interest loan. You pay $833 a month plus a tiny bit of interest but get the tax deferral immediately so in theory you should get somewhere around $2500 back on your taxes which you can then apply to the principle. Now you only owe $7500 on a $10 k loan. It still costs that $833 per month plus interest which now only takes you 9 months to pay off.
If you can build the 25 k each with a partner or spouse, having 50k to put down as a down payment makes you look good, plus borrowing and paying off loans increases your credit score. If you really really really really trust your partner or spouse, one of you can buy rsp's in their name. You get the tax deferral, they get the money in their rsp account. It's risky though, cause if they decide to cash the rsp you have to pay back the tax on it so trust is a really big issue here. Great if one of you makes more money.
Banks also like giving mortgages to married or common law couples because there's two parties they can go after if you default.
Re: Getting a mortgage as a Pilot
How would that help? If I read it correctly, the downpayment is not an issue, it is the income to pay off the mortgage that worries the banks.
As an AvCanada discussion grows longer:
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship
Re: Getting a mortgage as a Pilot
I am also a poor pilot trying to buy a house in the YYZ area. Its too bad they don't accept multi PIC when qualifying for a mortgage...
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Re: Getting a mortgage as a Pilot
Do they accept my PPC on a transport category aircraft?