buying a house at 19, opinions?

[gramboh]

Problems:

- Cosigning will probably not be enough, grandma will have to put up security (e.g. lien against property in Ontario)
- Legally you can make it sound with the right contract, but you are going to deal with absolute family misery if your GF and yourself break up (be realistic, you are 19)
- As landlord (as others have alluded to) you are legally bound to fix stuff when it breaks, on an old house this can be really expensive

I would be shocked if you found a family lawyer that would advise HER grandma to secure a mortgage in her granddaughter's 19 year old boyfriend's name with no recourse for her or her family.

On the plus side, you are obviously financially diligent and that puts you ahead of 90% of other 19 year olds. Just start saving money now, take advantage of the new TFSA (you can invest $5k per year with no tax deduction, but gains are not taxed, it's cuumulative etc), RRSPs etc. I'd advise saving up $5k and buying stock while the market is down, Canadian banks specifically as they are relatively safe bets and their prices will recover in the long term.

This is Lethbridge I assume? (I'm from Calgary)

 

[zerocool84]

Originally posted by: arkcom
I did the same thing as your talking when I was 20. (now about to turn 24) No girlfriend involved though.
Here's my deal
60k for house 10k in fix-ups
2500 sq ft - seven bedrooms about 12x11 each
rent $250/month per room all inclusive (no way you will get college kids to pay $500 for a room in your house, no matter how nice it is)
It is a nightmare dealing with all those roommates (so and so left dishes in the sink, your using all teh intarwebs, on and on and on)

Anyway, I gave up and rented the whole thing, much easier.

Your mortgage payment would be $1800/month not including insurance and taxes.
This is a bad idea.

edit: There is no way you will get a loan for 300k with 24k annual income, no matter who cosigns for you. If you really want to do this, G'ma will have to finance it for you herself.

No you didn't do the same thing. You're gf's grandmother didn't cosign and you bought a much cheaper house and didn't go into it knowing you could never afford the mortage payments yourself.

 

[Cogman]

Whats wrong with this picture?
1. GF as pointed out by others, if she dumps you, you're screwed in a big way.
2. What if you can't afford payments? Unless you have a good stable job it's not a wise idea to incur debt like this. Owning a house is a good Idea as they can gain value pretty easily, however, you can pretty much loose every penny you put into this if you can't afford to pay for it.
3. Do you really want to spend the next 10 years of your life in a college town? Think this through carefully.
4. Make sure grandma loves ya cause she could really screw you over as well.

 

[Aquaman]

Originally posted by: Epic Fail
Canada is still doing 100% financing, eh?

Nope.

Cheers,
Aquaman

 

[Koharski]

Thanks for the tips guys, although I don't think being in a relationship is an excuse to can the whole idea i've definately got some more stuff to think on.

I've rented in this town since I was 16, and believe me rent is expensive here. The cheapest i've ever had for a room was 375$ a month canadian, that didn't include utilities and I only got the rate because the renter was a good friend of my dad. I've looked through the classified ads in the paper and in the last 4 months there have been 3 rooms go up for rent on the same street all between 450-600$ (although the rooms on the higher end were fully furnished and brand new homes).

anyway I think you are right about not being eligible for the loan i'm probably screwed on this front anyway.

the city is nelson, bc by the way

 

[zerocool84]

Originally posted by: Koharski
Thanks for the tips guys, although I don't think being in a relationship is an excuse to can the whole idea i've definately got some more stuff to think on.

I've rented in this town since I was 16, and believe me rent is expensive here. The cheapest i've ever had for a room was 375$ a month canadian, that didn't include utilities and I only got the rate because the renter was a good friend of my dad. I've looked through the classified ads in the paper and in the last 4 months there have been 3 rooms go up for rent on the same street all between 450-600$ (although the rooms on the higher end were fully furnished and brand new homes).

anyway I think you are right about not being eligible for the loan i'm probably screwed on this front anyway.

HA $375 is cheap

 

[Cogman]

Originally posted by: Koharski
Thanks for the tips guys, although I don't think being in a relationship is an excuse to can the whole idea i've definately got some more stuff to think on.

I've rented in this town since I was 16, and believe me rent is expensive here. The cheapest i've ever had for a room was 375$ a month canadian, that didn't include utilities and I only got the rate because the renter was a good friend of my dad. I've looked through the classified ads in the paper and in the last 4 months there have been 3 rooms go up for rent on the same street all between 450-600$ (although the rooms on the higher end were fully furnished and brand new homes).

anyway I think you are right about not being eligible for the loan i'm probably screwed on this front anyway.

Its not the being in a relationship that is the problem. Its the "What if the relationship ends" that is the big issue. The fact that this lease will be so closely tied to the GF family is frighting. If you are just buying the house yourself then there would be no worries. However, the moment your GF or any of her family put something towards the house, you better look out.

 

[sandorski]

Originally posted by: joesmoke
dude, ur 19. you need to dump your gf and invest in things like boxes of condoms, fancy glass bongs, a fake id, and a keg-o-rator.

doesn't need

 

[gramboh]

Oh Nelson, can I rent a room next winter say Jan-Mar? I wouldn't mind taking the winter off and just skiing at WW and ski touring the Kootenays instead of working and living in this shithole up north .

The fact that it's in Nelson bodes a lot better for the rental aspect of it, but it's still risky and full of issues as I posted above.

 

[beat mania]

You should get someone from YOUR side of the family to cosign. A smaller chance of getting screwed.

Anyway, good job for at least trying to invest your money at 19 instead of blowing it on booze/drugs/girls/xbox.

 

[Farang]

Originally posted by: beat mania
You should get someone from YOUR side of the family to cosign. A smaller chance of getting screwed.

Anyway, good job for at least trying to invest your money at 19 instead of blowing it on booze/drugs/girls/xbox.

Not really, there is a reason most 19 year olds don't try to make decisions like these. Because as the OP demonstrates they have no business making them. Complaining about $500 rent as justification for buying a house you can't afford with a girlfriend who most certainly will dump you or vice versa? Give me the xbox, some blow, a hooker and a fifth of jack and we'll see who is better off in 10 years.

 

[Red Squirrel]

If you are guarantee you can secure your OWN money to do so, do it, but don't go through the GF. So if you think you can rent those rooms and have it paid in say, 2 years, and your relationship is solid, then go for it. I'd get a lawyer involved to ensure that there is a written legal agreement that the house is yours once paid for, or, right away, if you can.

You also have to consider the type of tenants you might have to endure. It's a risky thing, but if all goes well and you get average tennants that are nice and pay their bills, then that's great.

I've thought of buying a duplex or quadplex myself but I rather not get into the red tape of renting out.

 

[alkemyst]

You buying a house at 19 :thumbsup:

You buying a house at 19 with a gf :thumbsdown:

think about it man. In all honesty you shouldn't be thinking about settling down with anyone yet.

There are no 100% programs anymore...the 80/20 piggyback is no longer out there.

You could get by with 5% more than likely though...maybe 3.5%.

If the loan is going to be anything more than about 30% of you and your g/f's gross income a month you really shouldn't sign anything no matter who tells you otherwise.

Getting $500 for a room is not going to be easy almost anywhere right now...esp when one is looking at sharing a place with at least 4 others.

 

[xanis]

Originally posted by: Koharski
Thanks for the tips guys, although I don't think being in a relationship is an excuse to can the whole idea i've definately got some more stuff to think on.

I've rented in this town since I was 16, and believe me rent is expensive here. The cheapest i've ever had for a room was 375$ a month canadian, that didn't include utilities and I only got the rate because the renter was a good friend of my dad. I've looked through the classified ads in the paper and in the last 4 months there have been 3 rooms go up for rent on the same street all between 450-600$ (although the rooms on the higher end were fully furnished and brand new homes).

anyway I think you are right about not being eligible for the loan i'm probably screwed on this front anyway.

the city is nelson, bc by the way

LOLWUT

$375 CAD (~$302 USD) is CHEAP. Do you know what the average rent is around CC Philadelphia for a very small, very shitty, studio apartment? Roughly $500-600 USD per month, not including utilities. I moved a good distance south of CC, I'm splitting rent with a roommate, and rent is $700/month per person, utilities included.

 

[alkemyst]

Originally posted by: ja1484

"100% financing" is a euphemism for "buying shit with money I don't have" which is a euphemism for "going into debt" which is a euphemism for "everything that made this country go economically wrong since the Reagan administration".

100% financing was fine for those that intended to pay their bills. The problem was giving 100% financing to those with low to less than 600 scores and also doing such loans entering a rapidly declining market.

 

[MrMatt]

I'd do it. You'll OWN the house right, like your name on the deed?

 

[alkemyst]

Originally posted by: Auggie
What's the advantage of having a house if you decide to just live in the tiny basement and make the rest of the house available to the tenants? Why not just stay in an apartment where you don't have to worry about strangers living in your house, if the money works out the same?

If you're looking for a way to earn more from your money, start popping money into a 401k and max that out. The time will come when you can start a family and get a house, but it doesn't seem that wise to me, personally, to do so in your situation.

My landlord in my previous apartment lived in a 200 sq ft 'studio', he bought the place for $50k or so....<10 years later he sold it for $850k...doesn't happen everyday, but that's the idea. Same with people who buy a home and never live in it.

 

[Muadib]

While I commend you for wanting to get a house at 19, I have a few questions.

The grandmother is also willing to cosign with us on the mortgage, so that might help our credibility a little bit.

Why in sam hill would you want this? Yeah, she's in your corner now, you're banging her grandkid. What happens when that goes south? Have you thought about how you would protect yourself when that happens. Did you notice I said when.

the only problem I can forsee right now is that i'd require 100% financing on the house.

That would be very hard to do here in the US since you say you have little credit history, and only make 2k a month. You say you should be able afford a $1500 a month mortgage, but what are you basing that on? Your gf's salary won't count unless she's going on the mortgage too.

My plan was to buy the house, rent out the 4 bedrooms upstairs and share the small suite with my girlfriend. 4 bedrooms at 500$ a pop is 2 grand a month.

Ok, but is this legal for the house? If it isn't, then you can't count it as income when you go for the mortgage.

 

[arkcom]

My plan was to buy the house, rent out the 4 bedrooms upstairs and share the small suite with my girlfriend. 4 bedrooms at 500$ a pop is 2 grand a month.

Ok, but is this legal for the house? If it isn't, then you can't count it as income when you go for the mortgage.

Why wouldn't it be legal? Bigger problem is that rent that you WILL be making on a house doesn't count for anything. The only way to work that out is have g'ma loan the money and refinance in a year or two.

Which brings me to my next point, why not buy this on a land contract or lease with option to buy. Both will give you an out if things go south with the GF.

 

[LtPage1]

Originally posted by: Koharskii'd require 100% financing on the house.

You don't read the news much, do you?

 

[alkemyst]

Originally posted by: arkcom
Why wouldn't it be legal? Bigger problem is that rent that you WILL be making on a house doesn't count for anything. The only way to work that out is have g'ma loan the money and refinance in a year or two.

Which brings me to my next point, why not buy this on a land contract or lease with option to buy. Both will give you an out if things go south with the GF.

there can be tons of hurdles on this. 1 tenant usually not so much, looking at 4 a whole other game.

What parking is available? HOA / City rules? etc....

Any signors on a loan are all 100% responsible. The bank will focus on the best suited person and often move the lessor to the co-signing.

 

[ja1484]

Originally posted by: alkemyst

Originally posted by: ja1484

"100% financing" is a euphemism for "buying shit with money I don't have" which is a euphemism for "going into debt" which is a euphemism for "everything that made this country go economically wrong since the Reagan administration".

100% financing was fine for those that intended to pay their bills. The problem was giving 100% financing to those with low to less than 600 scores and also doing such loans entering a rapidly declining market.

Details...

 

[HardcoreRobot]

sounds like a terrible idea

not to mention as far as i know they dont even do 80/20 loans anymore, and at 19 you probably wont have enough credit history to even qualify for a great loan

 

[RaistlinZ]

Do it. What could possibly go wrong?

 

[L1FE]

You probably won't have to worry too much about your girlfriend, her grandma, or finding potential renters. Unless things are just vastly different in Canada, I just don't see how you can possibly get a loan for that much. To put things into perspective, my roommate was just pre-approved for a 300k house. It's an FHA loan, 3.5% down, 5% APR, and monthly payments are over $2100 (remember fees, insurance, etc). The biggest thing, though, is that he has good credit and income that's double yours and your girlfriend's combined. Unless you have someone doing the financing for you, there's no chance in hell, with this economy, that you can buy the house.