# critique my home purchase



## clovis8 (Dec 7, 2010)

I am pretty close to purchasing my first home and would be curious if other members would critique my choices to see if I am missing anything.

Background is I am single and make ca. 85k/year

I am looking at buying a home in this development;

Zen In Balance

1) The development is going for a platinum LEEDS energy efficiency rating which means I will get a 10% CMHC discount

2) The development is Holmes on Holmes approved which means it is inspected 12 times during construction

3) it is built by one of the highest rated developers in Alberta

4) I am looking at a unit that is 1148 sq feet and will be possession in December. It will be $235,000 GST included. I will be putting down 10% which I have saved up. 

5) I have a choice of either 2 and 1/2 bath or 1 and 1/2 bath and a large walk in closet. I am leaning towards the walk in closet. 

6) I think I will upgrade to laminate ($2700) and a few other upgrades for a total cost of all upgrades around 5k. Final price $240,000.

My numbers breakdown like this;










This leaves me about $3,300/month after taxes, mortgage and utilities for all other investing and expenses which seems like plenty to me. I currently pay $850/month rent for a basement apartment. 

Any advice is much appreciated.


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## NotMe (Jan 10, 2011)

To really critique it, you'll need to be more open with your finances: job stability, rrsp savings, current debt load, etc.

Also you'll need to more forthcoming on the house itself: location, proximity to work, schools, comparables, historical performance, etc.

Lastly I would strongly suggest you take your drawings to a flooring company for a second opinion on the cost. Home builders gouge the hell out of people for their upgrades, I know this from personal experience (I worked in a building trade).


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## Sampson (Apr 3, 2009)

Way out in the boonies, hopefully you don't work downtown.

Nothing inherently alarming about the project, either positive or negative, pricing seems about right for what you get and where it is.


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## clovis8 (Dec 7, 2010)

Sampson said:


> Way out in the boonies, hopefully you don't work downtown.
> 
> Nothing inherently alarming about the project, either positive or negative, pricing seems about right for what you get and where it is.


I work 5 minutes from the development.


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## clovis8 (Dec 7, 2010)

NotMe said:


> To really critique it, you'll need to be more open with your finances: job stability, rrsp savings, current debt load, etc.
> 
> Also you'll need to more forthcoming on the house itself: location, proximity to work, schools, comparables, historical performance, etc.
> 
> Lastly I would strongly suggest you take your drawings to a flooring company for a second opinion on the cost. Home builders gouge the hell out of people for their upgrades, I know this from personal experience (I worked in a building trade).


Job is very stable. I will soon be part owner. I have about 10k in rrsp but I have only finished my PhD last year and been working full time for less than 2 years. There are several schools nearby. 

I agree about the flooring. I think I am paying about a 20% premium but I think its worth it rather than trying to do it myself after the fact.


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## Charlie (May 20, 2011)

Consider draining the RRSP to reduce CMHC insurance? 

And if you have time and contribution room, see if you can top up your RRSP by your downpayment money -- needs to be in 90 days before withdrawal. That way you get a current yr RRSP deduction on those funds -- moneys repayable to the RRSP over 15 yrs. On $15K this will net you $5K this yr. Maybe you can update from Laminate to Hardwood .


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## clovis8 (Dec 7, 2010)

Charlie said:


> Consider draining the RRSP to reduce CMHC insurance?
> 
> And if you have time and contribution room, see if you can top up your RRSP by your downpayment money -- needs to be in 90 days before withdrawal. That way you get a current yr RRSP deduction on those funds -- moneys repayable to the RRSP over 15 yrs. On $15K this will net you $5K this yr. Maybe you can update from Laminate to Hardwood .


Damn I wish I had thought of this. I have saved 25k this year of my total take home salary of 57k. I should have cycled a lot of it through my RRSP. 

I do get. 10% CMHC saving due to the energy efficiency of my townhouse.


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## Charlie (May 20, 2011)

And further to my above post....you're relatively close to not needing CMHC insurance at all -- a $4K plus hit on your buy!

You need $47K (a 20% dp).

You have -- $24K plus $10K rrsp -- $34K. If you can find $13K somewhere -- extra savings; other borrowings; you can save yourself $4K. Something to consider? 

(and I think you still have time for the RRSP shuffle if your closing is December. Just be careful when mapping it out).


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## marina628 (Dec 14, 2010)

I think you pay CMHC on the amount you are short not the entire 20% value.For me I would pick the extra bathroom over the walk in closet any day.Also My brother did about 1200sq ft of laminate recently for about $900 but if you want laminate it is probably more sense to just get builder to do it.Do you plan to stay in this house a while?If not i would just got with builder standards all the way, hardwood you will get back in resale but i don't think so with Laminate.


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## Charlie (May 20, 2011)

CMHC, I'm pretty sure, is on the entire mortgage amount -- though on an a sliding scale depending on whether you have 5%, 10% or 15% down. None once you hit 20%. Even with the 10% discount avail here, it's pretty pricey.

Back in the crazy lend to anyone days -- some lenders would offer a HELOC to bridge your dp to the 20%. Thus skirting CMHC on the mortgage itself. I doubt that's avail any more. But finding another $15K or so may be an option to clovis. And given his rapid savings of this past yr, it may worthwhile even at a high interest rate on the bridge. Assuming, of course, he's prepared to tap out his cash flow for the next yr or so.


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## marina628 (Dec 14, 2010)

It may even make sense to use a cc for the remainder of 20% and pay it off in a few short months.But with a house it comes with lots of other expenses ,furnishings etc so that may be a dangerous route to go.


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## clovis8 (Dec 7, 2010)

marina628 said:


> I think you pay CMHC on the amount you are short not the entire 20% value.For me I would pick the extra bathroom over the walk in closet any day.Also My brother did about 1200sq ft of laminate recently for about $900 but if you want laminate it is probably more sense to just get builder to do it.Do you plan to stay in this house a while?If not i would just got with builder standards all the way, hardwood you will get back in resale but i don't think so with Laminate.


He got laminate installed for under a buck/foot!

Installation alone is about 2/foot I thought.


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## marina628 (Dec 14, 2010)

no he did it himself went to home deposit and bought it


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## clovis8 (Dec 7, 2010)

marina628 said:


> no he did it himself went to home deposit and bought it


Ah sadly I would never have the time or skill to install it.


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## jamesbe (May 8, 2010)

How is laminate an upgrade? Laminate costs less generally than Carpet, hardwood sure.


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## clovis8 (Dec 7, 2010)

jamesbe said:


> How is laminate an upgrade? Laminate costs less generally than Carpet, hardwood sure.


Perhaps but it is always considered an upgrade. The laminate I get is high end and even allows one sanding.


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## jamesbe (May 8, 2010)

Ah most likely engineered hardwood.


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## clovis8 (Dec 7, 2010)

I was thinking of getting a variable rate mortgage but those rates are getting worse. I am being offered a 4 year fixed at 2.99 which sounds pretty great to me. It is a 20/20 mortgage also.


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## Young&Ambitious (Aug 11, 2010)

leave your $10k in your RRSP. Why have all your eggs in one basket? Diversify, it's good for you.


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