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200 a month !!! Really?
- Thread starter gcrouse
- Start date
I know what the monthly difference is that's why I said going from 2 to 4% on a 500k mortgage is $500/Mo. I used a 2% hike because that, to me, would be a drastic increase in this economic climate. And even that rise would probably take 2 years to happen. Not overnight.
In the context of the original post, that 2% hike would decimate a lot of people....but those people are idiots, no offense.
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Yeah, we seem to have moved into real estate speculation, which takes a special type of pr..person. Basically, you take advantage of the fact that you can borrow, and the 200 a month people cannot, so you let them pay down your mortgage. Or just price them right out of the market, and let richer people pay down your mortgage, then flip it for a profit. That being said, you need to have your wits about you, as there are many people doing the same, and some will try and sucker the competition in over their heads, or just price them out of the market.
-D-
Banned
And those people will pull you down with them in one way or another.
There are a lot of them.
There are a piece on the car subprime lending mess too...much smaller scale but still the same deal...ppl getting cars they can't afford or paying off cars in 7 years.
Not everybody needs or deserves a house? Lots of rentals and condos on the market. In fact condos are only appreciating about 2.5-3% per years. But I hear what you're saying. The folks who are gonna go bust on a 0.5% rate hike are a wildcard; but they're also precisely the reason our fed will be VERRRY careful about increasing the rates.
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-D-
Banned
Glad you heard...also what about the ppl that took the deals of everything included for the first 1-2 years for a low price...then after that time period maint and other fees goes back UP.
It's funny how we are packed in and build houses so close considering we are the 2nd largest country by land mass on the planet with one of the smallest population...lol
I can honestly say I am living pay check to pay check right now and dipping into my savings a tiny little bit every month ... BECAUSE ? of the damn daycare costs !!! $1500 / month in daycare costs is ridiculous ... can't wait for my kid to grow up and go to regular school ...
granted if it came down to it, we COULD sell the house and move to something smaller but I'd rather dip into my savings a couple hundred per month until he's 4 years old and attends regular JK. the prices of bigger houses just goes up faster than a smaller house so I might be paying out $200 / month out of my savings but I'm gaining WAY more than that on a large property and I know the suffering is only temporary.
granted if it came down to it, we COULD sell the house and move to something smaller but I'd rather dip into my savings a couple hundred per month until he's 4 years old and attends regular JK. the prices of bigger houses just goes up faster than a smaller house so I might be paying out $200 / month out of my savings but I'm gaining WAY more than that on a large property and I know the suffering is only temporary.
theres part of it, $1500 for day care, for 1 kid. For a family with 2 -3 kids its so unbearable 1 parent stays home. It gets better but you still have before and after school. Then budget 10k a year if your kid is any good at hockey and gets on a traveling team. Then 25k a yr for university.
Never has 15mins of fun cost so much. BJ's people, for your financial safety just get BJ's
Never has 15mins of fun cost so much. BJ's people, for your financial safety just get BJ's
black_CG2
Well-known member
for us, my wife wants another kid but we spaced them out (wife not preggers) but if she does even now, my kid will be 4 by next school year so I'd only be 'on the hook' for $1500 / month in daycare costs for only 1 kid. After school care is a non-issue as my parents will be retiring next year and they can keep an eye on him for a few hours after school everyday.
My co-worker here is supporting 2 kids in daycare right now with an 18 month overlap ... so he's out $3000 / month in daycare costs alone right now... ridiculous.
Ah but you own a motorcycle with the associated costs. Those could be dumped to balance the budget. Many others living tight don't have anything to cut back on.
The OP noted that the GTAM populace didn't seem as affected as he would have thought. That is likely because the GTAM populace doesn't represent a true cross section of society. Ferrari owners would likely be under represented in the $200 club as well.
You also have a house, hopefully adding to your net worth, something many others don't have. Equity in a house allows you access to lower rate loans if you need a bit of spare cash from time to time. Money makes money.
We didn't pay for day care because my wife took the time off work to raise our kid. Now the talk is all about free day care. It isn't free. I will be paying for it through taxes. Yeah, I'm a part time Republican.
Due to the time frame we didn't have several smart phones or cable. A land line and a TV antenna could save the best part of the $200 a month but then how does one get ahead if the job offer says "Email resume".
Can we go back? I doubt it. Too many jobs today fail to provide any form of satisfaction so we buy toys or go crazy.
You usually get a multi-kid discount, our twins did. Also, look into getting a nanny. Sometimes they are less expensive.
Somebody's got to work their butt off to pay for my retirement. There also needs to be some incentive to have kids, otherwise the pyramid scheme will collapse.
$1500 a month for daycare? Holy cR@pp what happens at daycare? Oh wait, my bad, $1500 is the new $500. You can't trailer a motorcycle from TO to Barrie for $400 without swinging by the food bank whilst you go into the red. "The red" is the bad one amirite.
We were paying $2000/month ($1000/month per kid) for Daycare back in the early 2000's.
We both still worked because were were still ahead in the end (not insignificantly), but it was a big line on the budget, that's for sure. Suffice to say we were glad when both of them started fulltime school.
I can see how lower earners would just potentially quit vs paying that sort of money...especially if it's a break even situation, or worse yet, money loosing situation.
We both still worked because were were still ahead in the end (not insignificantly), but it was a big line on the budget, that's for sure. Suffice to say we were glad when both of them started fulltime school.
I can see how lower earners would just potentially quit vs paying that sort of money...especially if it's a break even situation, or worse yet, money loosing situation.
I was thinking that at the "15 minutes of fun part". Is that how long it's supposed to take? I need to go apologize to my wife.You sir win.
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Megamaniac
Well-known member
For me the decision was made for the wife to quit job and stay home and raise the kids was for reasons other than financial.I just hated putting a 1 to 2 month old in a freezing cold car in the winter making trek from orangeville at the time and felt the risk was too great and looking back was the right thing. I also could not see myself leaving my kids with a sitter or daycare who in reality have no interest in the outcome of the children I am not saying all are bad but if even 2% are thats enough for me.
@mmmnaked,
I'm not speculating on the fact that interest rates will go up overnight, but, you have to admit, in the last 100 years all recessions have been engineered, so they could. What I didn't mention in my post is that the price of houses has been increasing proportionately to the decrease in interest rates. The interest rates, can't go down another 4% like they have in the last 15 years, otherwise the banks will be paying you to take money. So let's assume they remain constant for the forseable future. The problem is that the gov't has been lowering interest rates to keep the economy moving and 'soften' any speculation of recession. Where this becomes concerning is that people have been overspending at increasing rates causing a necessity for the gov't to lower rates which in turn causes excess spending...
Vicious circle. It's not that the rates will go up that causes the problem, it's that they can't go down. Furthermore, if you lose your house, and the bank can't sell it for a price that will recoup their costs, then you're on the hook for the remainder. Example, buy house for $500k, $400k of which is mortgaged, bank can only sell it for $380k, not only did you lose your $100k downpayment, you still owe the bank another $20k. This isn't the States where you hand in the keys and walk away. I understand that you need to live somewhere, so nominal house prices don't make much difference if you're moving from one house to another, what I wouldn't recommend is buying income properties. For income properties you need the 20% downpayment, that's your money that you can stand to lose and given the fact that interest rates most likely won't go down in the near future like they have in the recent past, the likelyhood of capital gains are diminishing.
Side note, holy hell daycare is expensive in TO.
I'm not speculating on the fact that interest rates will go up overnight, but, you have to admit, in the last 100 years all recessions have been engineered, so they could. What I didn't mention in my post is that the price of houses has been increasing proportionately to the decrease in interest rates. The interest rates, can't go down another 4% like they have in the last 15 years, otherwise the banks will be paying you to take money. So let's assume they remain constant for the forseable future. The problem is that the gov't has been lowering interest rates to keep the economy moving and 'soften' any speculation of recession. Where this becomes concerning is that people have been overspending at increasing rates causing a necessity for the gov't to lower rates which in turn causes excess spending...
Vicious circle. It's not that the rates will go up that causes the problem, it's that they can't go down. Furthermore, if you lose your house, and the bank can't sell it for a price that will recoup their costs, then you're on the hook for the remainder. Example, buy house for $500k, $400k of which is mortgaged, bank can only sell it for $380k, not only did you lose your $100k downpayment, you still owe the bank another $20k. This isn't the States where you hand in the keys and walk away. I understand that you need to live somewhere, so nominal house prices don't make much difference if you're moving from one house to another, what I wouldn't recommend is buying income properties. For income properties you need the 20% downpayment, that's your money that you can stand to lose and given the fact that interest rates most likely won't go down in the near future like they have in the recent past, the likelyhood of capital gains are diminishing.
Side note, holy hell daycare is expensive in TO.
-D-
Banned
smart for you...not too many ppl think that way...until it's too late
ppl I worked with (downtown) would be at work for 8-8:30am meaning dropped kids off at 7am then leave work on the Go Train (faster than driving) back to Oakville etc... picked up their kid around 7pm if all went well...kids were under 1 year old...but hey...they were happy with their big house and German luxury car in the driveway.
FFWD--- company party (Hard Rock, company band)...one of the VP's...her daughter (18-20) came...totally gothed out piercing all over...I am sure mommy was proud to see her slobby gothed out kid (drinker and drugger)...and you can tell the daughter did not seem to like her mother.
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