Sunday, November 20, 2011

Went to look at rental houses today near the new job starting in January. In a total turnaround, we ended up leaving thinking we're going to buy a house and if things don't work out, turn it into a rental property. Hmmm.. how life changes quickly! Did a quick mortgage calculation this evening and we figured out that we would be approved for a ridiculous sum - a sum we could never afford without giving the majority of our monthly income to our home (i.e. no eating). I had a fun fantasy 15 minutes looking at houses that cost that much and then came back down to earth to look at some practical options. Looks like we might be home owners soon! Scary thought!


Liana said...

If you're going through CMHC for your mortgage, they will probably consider you self-employed and because you don't have 2 years of income history, they'll charge you a premium on your mortgage as insurance. I was working at a clinic which guaranteed a minimum amount of income per month, so my mortgage broker was able to get something like 10% shaved off our mortgage.

Have fun looking at houses and good luck finding one that you love!

medstudentitis said...

I've been a resident for over 2 years so that would count as income history, no?

Liana said...

My understanding is no.

If you're salaried (ie a resident), you just need to give a letter from your employer which states your current salary. Unfortunately, this means that the amount they approve you for will be calculated based on your salary as a resident.

If you apply once you've finished residency, you will be considered self-employed (unless you manage to get on salary somewhere), and then you need to show two years of NOAs to CMHC to prove your income. If you can't do that (which you can't because you've been self-employed for less than two years), then you have to pay the self-employed without 3rd party verification premium.

I don't know if that makes much sense.

Buying a house now while you're still a resident and are still salaried may be the better option? I guess it depends on how much you're hoping to get.

Do your friends have any recommendations for good mortgage brokers? Ours was pretty amazing... he did a lot of work for us, and saved us a lot of money.

medstudentitis said...

As a resident with my husband's income, we will get approved for enough to buy the house that we want. Thankfully. We just need to get approved fast before I'm no longer a resident! We don't have a mortgage broker but I'm going to ask around. My husband is really into the idea of a mortgage account style where you get the amount deducted from your mortgage interest that they owe you in interest on the money in your account. That way, when I'm saving the money for taxes and stuff next year, I'll be able to use that money to lower my mortgage.

Liana said...

Yay, good to hear!

(And sorry if my first post was confusing.)

medstudentitis said...

Liana - it was still excellent advice for when we need to get our next mortgage!