In possibly some of the worst “advice” I’ve seen someone give to first time buyers, mortgage broker James DuVuyst tells Abodable.com readers to get while the gettin’s good here in Vancouver. Ugh. Stuff like this really irritates me. Not only is it bad advice, but it’s dangerous. People are already buying and living beyond their means. Having “experts” tell them to strike while the iron’s hot, because there are still bargains to be had, seems irresponsible.
Here’s DuVuyst’s rationale for why young Vancouverites should jump on the bandwagon (is there even a bandwagon to jump on anymore??):
Interest rates are SOOOO low
Interest Rates are at all-time lows and they keep dropping depending on the lender and program. Currently, right now, you can get a 5 year mortgage, high ratio (20% or less down) at 2.79%. That’s amazing considering in 2010 rates were at 3.69% and creeping into the 4% range. This allows first time buyers who choose a 5 year term to be qualified at 2.79% on a 25 year amortization. What this does is extend your purchasing power (assuming you have the minimum 5% down). Because of this, first time buyers can qualify in a higher price range, allowing them to enter into the expensive Vancouver market. I mentioned in a previous blog to think about increasing interest rates and how it affects your budget. Don’t overextend, but always keep the thought in the back of your head, “if rates were to increase by 1% how would this affect me?” Look into the future and plan!!! Read more…