Getting a mortgage as a Pilot

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co-joe
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Re: Getting a mortgage as a Pilot

Post by co-joe »

digits_ wrote: Fri May 31, 2019 10:36 am 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.
Well the OP didn't mention what part of the equation was the issue. He just says he can't get a mortgage on the shit money he makes. Maybe more of a down payment would help?

There's also a thing in the 2019 federal budged called the CMHC First Time Home Buyer's Incentive. This article suggests it's supposed to be in place by September this year.

https://globalnews.ca/news/5069183/budg ... rdability/

There's also this which relates to my suggestion and may help...if it happens.
As was widely anticipated, the government would also enhance the Home Buyer’s Plan (HBP), which currently allows first-time buyers to take out up to $25,000 from their registered retirement savings plan (RRSP) to finance the purchase of a home, without having to pay tax on the withdrawal. The budget proposes raising that cap to $35,000.
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complexintentions
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Re: Getting a mortgage as a Pilot

Post by complexintentions »

ShawnR wrote: Wed May 29, 2019 7:58 pm 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!
Agreed that mortgage payments should be done on biweekly not monthly. But paying down principal faster on a mortgage at 2.99% when a balanced diversified portfolio conservatively returns 6% over time may be psychologically rewarding, but not good financial advice. (High-rate consumer debt like credit cards or LOC debt is a different story).

The opportunity cost of money tied up in Canadian real estate is a Greek tragedy of misallocated capital. Poorly-built overpriced crap that people slave their whole lives for. Makes me sad.
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jakeandelwood
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Re: Getting a mortgage as a Pilot

Post by jakeandelwood »

Another option to consider if you have the ambition and drive is to build your own house, I did it, it took me 5 years while I worked full time and lived in a travel trailer in the driveway. Im not talking about paying a contractor to do it for you, or being your own contractor, I'm talking about doing it all yourself. That was the best financial decision I ever made. I bought a lot with a teardown house on it for 190k, spent 10k on the demo and 60k on building materials (houses are actually fairly cheap when you don't have to pay someone to put it all together!) So now I have a mortgage on 190k and a house that's been assessed at 450k, way better than a mortgage on 450k. Since I just bought materials as I went over 5 years I just paid out of pocket and it wasn't so bad. The building inspector told me I easily saved 20k doing my own plumbing and electrical. This option was the only way I could get a nice house with my salary at the time, everyone said I was crazy and it was a hell of a lot of work but I'm sure glad I did it in the end.
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ehv8oar
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Re: Getting a mortgage as a Pilot

Post by ehv8oar »

Good on ya for building your own house, that's certainly the best value for money your going to get!

I considered doing that but I know after 10 years of construction I'd end up with something like this

https://www.google.ca/search?q=shack&pr ... g_bjbxkRM
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Brize
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Re: Getting a mortgage as a Pilot

Post by Brize »

ehv8oar wrote: Wed May 29, 2019 6:55 am Yeah that's the problem I'm coming up against.

The annoying thing is that I certainly can afford the repayments, I'm paying more now in rent, it's just that to qualify they use a much higher rate than you actually get once you have the mortgage.

Thanks for the info though.
If you think simply comparing rent to a monthly mortgage withdrawal is enough, you've got a lot of life experience to gain. You can almost double a typical monthly mortgage payment (if detached home) and that is the average cost to owning a property.

Up front; CMHC insurance, closing legal costs and land transfer tax. Then monthly property tax, home insurance, mortgage insurance, water/sewer delivery, heating, a/c. Eventually repairs/maintenance, then roof and windows, furnace, water tank replacement.

There's good reason why they use the higher rate for "qualification".
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digits_
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Re: Getting a mortgage as a Pilot

Post by digits_ »

ehv8oar wrote: Sat Jun 01, 2019 5:08 am Good on ya for building your own house, that's certainly the best value for money your going to get!

I considered doing that but I know after 10 years of construction I'd end up with something like this

https://www.google.ca/search?q=shack&pr ... g_bjbxkRM
Which would still go for a million in Toronto :mrgreen:
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goingnowherefast
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Re: Getting a mortgage as a Pilot

Post by goingnowherefast »

FWIW, I'm spending on average $700 a month on all the ancillary costs of owning my house. That's taxes, water, gas, electricity, insurance, plus a healthy extra set aside for repair bills. For example, the roof alone is, at minimum, $15,000 to replace every 15 years. Might as well set aside another $100/month just for that.

Add the mortgage on top of that.
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whipline
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Re: Getting a mortgage as a Pilot

Post by whipline »

I have no clue what your finances are like. But you might want to try secondary lenders, I’ll get to that in a second.

I remember sitting with my banker years ago and saying it’s BS I can’t use per diem towards mortgages or loans. He said the bank will look at it if it’s been more then two years. They will average the amount. Mind you my per diem at the time was over 50,000.

Secondary lenders have less stringent requirements for giving out money. Generally more creative. And believe it or not the best interest rates your going to get is a new buyer with little money down, the mortgage is insured. If your planing on renting rooms you can use that as income as well. I know the CRA will!

Go speak to an experienced mortgage broker.
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jakeandelwood
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Re: Getting a mortgage as a Pilot

Post by jakeandelwood »

When I went to my bank for a mortgage they did a pretty good job of making me feel like a loser because they said I didn't make enough to qualify for the amount I needed which was only 200k. I then went to a broker and they offered me 50k more than the bank would right away, and that was enough of a difference to make my plan work. Now 8 years later my bank keeps asking me to switch my mortgage to them. Yeah right, FU bank
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schnitzel2k3
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Re: Getting a mortgage as a Pilot

Post by schnitzel2k3 »

jakeandelwood wrote: Sun Jun 02, 2019 10:39 am When I went to my bank for a mortgage they did a pretty good job of making me feel like a loser because they said I didn't make enough to qualify for the amount I needed which was only 200k. I then went to a broker and they offered me 50k more than the bank would right away, and that was enough of a difference to make my plan work. Now 8 years later my bank keeps asking me to switch my mortgage to them. Yeah right, FU bank
You were smart to seek out a broker, as you likely got a discount on your rate which helped clear you for that extra 50k.

The banks are about the WORST place to get any financial advice, period, despite what those CIBC Penguins tell ya. There's a reason they are some of the best stocks to hold, and it's not because they are helping out their clients. Use them for the basics, don't pay any additionals if you can avoid it, and keep everything else diversified between investments and debt amongst other financial institutions. Don't worry jake, you might be quoted, but I know you already know this hehe.

There, some anonymous forum financial advice. Tell'em S sent ya.
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jakeandelwood
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Re: Getting a mortgage as a Pilot

Post by jakeandelwood »

schnitzel2k3 wrote: Mon Jun 03, 2019 4:07 am
jakeandelwood wrote: Sun Jun 02, 2019 10:39 am When I went to my bank for a mortgage they did a pretty good job of making me feel like a loser because they said I didn't make enough to qualify for the amount I needed which was only 200k. I then went to a broker and they offered me 50k more than the bank would right away, and that was enough of a difference to make my plan work. Now 8 years later my bank keeps asking me to switch my mortgage to them. Yeah right, FU bank
You were smart to seek out a broker, as you likely got a discount on your rate which helped clear you for that extra 50k.

The banks are about the WORST place to get any financial advice, period, despite what those CIBC Penguins tell ya. There's a reason they are some of the best stocks to hold, and it's not because they are helping out their clients. Use them for the basics, don't pay any additionals if you can avoid it, and keep everything else diversified between investments and debt amongst other financial institutions. Don't worry jake, you might be quoted, but I know you already know this hehe.

There, some anonymous forum financial advice. Tell'em S sent ya.
That's all so true, but I didn't know that 10 years ago unfortunatly, life experiece, life lessons I guess!
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schnitzel2k3
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Re: Getting a mortgage as a Pilot

Post by schnitzel2k3 »

Life is a good teacher, she tends though to teach the lesson after the test though, lol.

S.
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parallel60
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Re: Getting a mortgage as a Pilot

Post by parallel60 »

jakeandelwood wrote: Fri May 31, 2019 11:18 pm Another option to consider if you have the ambition and drive is to build your own house, I did it, it took me 5 years while I worked full time and lived in a travel trailer in the driveway. Im not talking about paying a contractor to do it for you, or being your own contractor, I'm talking about doing it all yourself. That was the best financial decision I ever made. I bought a lot with a teardown house on it for 190k, spent 10k on the demo and 60k on building materials (houses are actually fairly cheap when you don't have to pay someone to put it all together!) So now I have a mortgage on 190k and a house that's been assessed at 450k, way better than a mortgage on 450k. Since I just bought materials as I went over 5 years I just paid out of pocket and it wasn't so bad. The building inspector told me I easily saved 20k doing my own plumbing and electrical. This option was the only way I could get a nice house with my salary at the time, everyone said I was crazy and it was a hell of a lot of work but I'm sure glad I did it in the end.
Thats amazing that you built your own house. My dad has been a Plumber his whole life and built many houses. I wish I knew a 1/10th of what he knows. The knowledge is definitely out there but you have to spend time to acquire it. Must have been satisfying to build your place. I remember working as a Pilot out of Calgary years ago and I was making low money so I decided to get into a trade part time. I bought a newspaper, went to the classified job ad's and called the first phone number looking for a "Framing/Carpenter Helper." He said I could start tomorrow morning, 10$/hr to start and I would have to buy my own tool belt, etc. It was an amazing opportunity into the trade. He said I could work as much as I wanted as well. The flying job didn't work out long term and I had to relocate but it shows that there are opportunities to learn the trades and save a bunch of money either building your own place or even maintaining it. Unfortunately I never continued into a trade and stuck to the flying thing but I wish I had stayed in it on the side. Again, great job on the house build...
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jakeandelwood
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Re: Getting a mortgage as a Pilot

Post by jakeandelwood »

parallel60 wrote: Tue Jun 04, 2019 9:04 am
jakeandelwood wrote: Fri May 31, 2019 11:18 pm Another option to consider if you have the ambition and drive is to build your own house, I did it, it took me 5 years while I worked full time and lived in a travel trailer in the driveway. Im not talking about paying a contractor to do it for you, or being your own contractor, I'm talking about doing it all yourself. That was the best financial decision I ever made. I bought a lot with a teardown house on it for 190k, spent 10k on the demo and 60k on building materials (houses are actually fairly cheap when you don't have to pay someone to put it all together!) So now I have a mortgage on 190k and a house that's been assessed at 450k, way better than a mortgage on 450k. Since I just bought materials as I went over 5 years I just paid out of pocket and it wasn't so bad. The building inspector told me I easily saved 20k doing my own plumbing and electrical. This option was the only way I could get a nice house with my salary at the time, everyone said I was crazy and it was a hell of a lot of work but I'm sure glad I did it in the end.
Thats amazing that you built your own house. My dad has been a Plumber his whole life and built many houses. I wish I knew a 1/10th of what he knows. The knowledge is definitely out there but you have to spend time to acquire it. Must have been satisfying to build your place. I remember working as a Pilot out of Calgary years ago and I was making low money so I decided to get into a trade part time. I bought a newspaper, went to the classified job ad's and called the first phone number looking for a "Framing/Carpenter Helper." He said I could start tomorrow morning, 10$/hr to start and I would have to buy my own tool belt, etc. It was an amazing opportunity into the trade. He said I could work as much as I wanted as well. The flying job didn't work out long term and I had to relocate but it shows that there are opportunities to learn the trades and save a bunch of money either building your own place or even maintaining it. Unfortunately I never continued into a trade and stuck to the flying thing but I wish I had stayed in it on the side. Again, great job on the house build...
Thank you. It was satisfying for sure, especially when you finally get out of the ground and start framing and have something that starts to look like a house. I tell ya though I had my doubts when I 1st started and I just had demoed the old house and all I had was a lot with a mountain of demo waste on it. I thought what the hell am I doing? Good thing I'm stubborn or I would have given up. I have a lot more respect for contractors now and the organizing that is involved.
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