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Generally I approve of this type of thinking, it's how I got my start, too. So I'm only quibbling to improve the fidelity of the model for those who are like u

Generally I approve of this type of thinking, it's how I got my start, too. So I'm only quibbling to improve the fidelity of the model for those who are like us. 1) My impression is that it's prettttty tough to get those 10% down mortgages these days. Though, again, that's behind me now, I could be wrong. 2) The bank will not consider your accom to be mortgage-minus-sublet-rent for the stress test, I promise you. They'll count your rent as additional income, at some discount (fuck you, bank), and then count 30% of that against your mortgage payment (for the stress test). I guess if you know someone who actually got this past the bank stress test then let us know, and let us know which bank, because I'll move the next time my mortgage comes up. But I have tried in the past. So you'd need a joint income of 200k (I trusted your estimate of mortgage at present rates on $810k), minus 10k/a for the rent, is $95k each, $46/h. Still. Although it is definitely difficult, it is, as you say doable.

applied_heat 3y ago
I meant brailsafe’s share of the down payment is 90k, and brailsafe’s partner would also have to come up with 90k. 20% down. Agree 10% down is not plan A. Also agree on the banks being difficult to work with on including the future rental income when qualifying. It sucks if you are a single person - probably have to go apartment route or 1 bedroom condo. The most successful guy I know, who has a pretty sick motor yacht now, had a room mate until his now wife moved in.
- user_named 3y ago
  He's not saying banks are difficult to work with. He's saying your entire calculation is funds mentally wrong.
- jholman 3y ago
  > 20% down. Agree 10% down is not plan A. Right, okay. And, to be clear, back in my day 5% down (FIVE) was totally plan A, so that has gotten harder for the next generation. Thanks, fedgov! > difficult to work with Heh, notwithstanding the amusing savagery of my sibling comment, is "difficult to work with" a euphemism for "impossible to work with", or do you have reason to believe that this is even possible? > It sucks if you are a single person I would say that it's getting closer to hopeless if you're a single-income family, and being a single-income individual isn't much better, because 1br condos are actually not that much cheaper than 1br. I'm in a condo, btw, and I could have done it on my income alone when I bought (laxer stress tests, I provided the down solo anyway, rates were lower, prices were lower), but I could not buy this condo solo today, and certainly not with the income I had then. I guess my overall message is: I think that the type of financial modelling you were doing is excellent to show that it is not yet impossible or hopeless, and if someone wants to make it happen, it's still within reach... but... it's genuinely really hard. For decades I've been scoffing at people whining about affordability, saying that they just spend too much on short-term pleasures, but in the last decade I've kinda stopped the scoffing and shut my mouth.
  - brailsafe 3y ago
    The math for a 1 bedroom condo in the 20 min from downtown (not that it's relevant to my lifestyle) works out to about $5k a month if I had a clean income history and a 20% downpayment. It's just not an amount I could see my partner and I being able to absorb, nor would it be worth it if we could. It's unfortunate, because we've lived in our already relatively expensive studio basement suite for 4 years. Shit is cray out there.
    - jholman 3y ago
      I mean, I guarantee you can do better than that. The condos you describe certainly exist, but there are other options. Maybe 2 bedrooms for $3k isn't enough of a difference for you to care about, though. And you don't need a "clean income history", that's not a real thing. You need all the people on the mortgage to have a stable job, typically 6 months. If your source of income is more variable/complicated, they'll ask for 2 years of tax returns. This kind of doomerism is why I wanted to support applied_heat's post in the first place.
      - brailsafe 3y ago
        I don't really think 2 bedrooms for $3k, in Metro Vancouver would be a likely find. I'd say even if you're willing to sacrifice literally every other characteristic, but usually if you're in that range now you're looking at very high condo fees or something like no laundry in building. But again, if space is literally all you're after, and you might be for all sorts of perfectly valid reasons, then that might be your choice. On the flipside, it would be weird for us to work relentless and double or more likely triple our monthly expenditure while basically getting only marginal or specious value for that money. For example, even if the numbers or stability on our end made sense, and committing to that wild increase in cost didn't increase our exposure dramatically, we'd still be trading triple our shelter expenses for the added utility of basically one room and the power to knock out a wall or something. No matter how you spin it, without a huge pool of cash and unrealistically high income(s), or a bunch of people subsidizing your mortgage, it's not impossible but generally not a sensible move unless you absolutely must own something for some reason. I can theoretically earn above $100k, but it doesn't really matter unless that's sustained for a long time with few breaks, and that's not happening enough to bet on, such that I'd take out a mortgage expecting that income to be there long-term. I'm not sure it's doomerism, as in, I wasn't saying things were "hopeless", just unrealistically demanding to attempt pursuit of what used to be considered a standard gradual path of upward growth. I live where I do despite that, and basically will until it's not feasible to do at all, along the way we'll have to face some seriously tricky choices anyway unless we can find someone else's basement to live in till at least our mid-thirties.

applied_heat 3y ago

I meant brailsafe’s share of the down payment is 90k, and brailsafe’s partner would also have to come up with 90k. 20% down. Agree 10% down is not plan A. Also agree on the banks being difficult to work with on including the future rental income when qualifying. It sucks if you are a single person - probably have to go apartment route or 1 bedroom condo. The most successful guy I know, who has a pretty sick motor yacht now, had a room mate until his now wife moved in.

user_named 3y ago
He's not saying banks are difficult to work with. He's saying your entire calculation is funds mentally wrong.
jholman 3y ago
> 20% down. Agree 10% down is not plan A. Right, okay. And, to be clear, back in my day 5% down (FIVE) was totally plan A, so that has gotten harder for the next generation. Thanks, fedgov! > difficult to work with Heh, notwithstanding the amusing savagery of my sibling comment, is "difficult to work with" a euphemism for "impossible to work with", or do you have reason to believe that this is even possible? > It sucks if you are a single person I would say that it's getting closer to hopeless if you're a single-income family, and being a single-income individual isn't much better, because 1br condos are actually not that much cheaper than 1br. I'm in a condo, btw, and I could have done it on my income alone when I bought (laxer stress tests, I provided the down solo anyway, rates were lower, prices were lower), but I could not buy this condo solo today, and certainly not with the income I had then. I guess my overall message is: I think that the type of financial modelling you were doing is excellent to show that it is not yet impossible or hopeless, and if someone wants to make it happen, it's still within reach... but... it's genuinely really hard. For decades I've been scoffing at people whining about affordability, saying that they just spend too much on short-term pleasures, but in the last decade I've kinda stopped the scoffing and shut my mouth.
- brailsafe 3y ago
  The math for a 1 bedroom condo in the 20 min from downtown (not that it's relevant to my lifestyle) works out to about $5k a month if I had a clean income history and a 20% downpayment. It's just not an amount I could see my partner and I being able to absorb, nor would it be worth it if we could. It's unfortunate, because we've lived in our already relatively expensive studio basement suite for 4 years. Shit is cray out there.
  - jholman 3y ago
    I mean, I guarantee you can do better than that. The condos you describe certainly exist, but there are other options. Maybe 2 bedrooms for $3k isn't enough of a difference for you to care about, though. And you don't need a "clean income history", that's not a real thing. You need all the people on the mortgage to have a stable job, typically 6 months. If your source of income is more variable/complicated, they'll ask for 2 years of tax returns. This kind of doomerism is why I wanted to support applied_heat's post in the first place.
    - brailsafe 3y ago
      I don't really think 2 bedrooms for $3k, in Metro Vancouver would be a likely find. I'd say even if you're willing to sacrifice literally every other characteristic, but usually if you're in that range now you're looking at very high condo fees or something like no laundry in building. But again, if space is literally all you're after, and you might be for all sorts of perfectly valid reasons, then that might be your choice. On the flipside, it would be weird for us to work relentless and double or more likely triple our monthly expenditure while basically getting only marginal or specious value for that money. For example, even if the numbers or stability on our end made sense, and committing to that wild increase in cost didn't increase our exposure dramatically, we'd still be trading triple our shelter expenses for the added utility of basically one room and the power to knock out a wall or something. No matter how you spin it, without a huge pool of cash and unrealistically high income(s), or a bunch of people subsidizing your mortgage, it's not impossible but generally not a sensible move unless you absolutely must own something for some reason. I can theoretically earn above $100k, but it doesn't really matter unless that's sustained for a long time with few breaks, and that's not happening enough to bet on, such that I'd take out a mortgage expecting that income to be there long-term. I'm not sure it's doomerism, as in, I wasn't saying things were "hopeless", just unrealistically demanding to attempt pursuit of what used to be considered a standard gradual path of upward growth. I live where I do despite that, and basically will until it's not feasible to do at all, along the way we'll have to face some seriously tricky choices anyway unless we can find someone else's basement to live in till at least our mid-thirties.