Helping Frustrated Renters Become HAPPY Homeowners

Apparently today (as I write this) is International Men’s Day. Did you know it? I wouldn’t have, had the morning news not mentioned it. They were as surprised to read that on their teleprompter as I was to hear it.

Why we need International Men’s Day, I’m not sure. Maybe, there is a good reason. But, if we have International Women’s Day, in interests of being non-discriminatory, I suppose it’s appropriate to also schedule a Men’s Day. And, I guess it’s fitting that it be scheduled in mid-November, the month sometimes allocated to men’s health (as in MO-vember).

I don’t know who designates these things. Perhaps it doesn’t matter. Maybe someone just declares it to be so and the word gets around, the designation grows, and eventually it becomes widely recognized (or not).

Seems almost every day of the year has some such designation: Secretaries’ Day, Nurses’ Day, Teachers’ Day, Plant a Tree Day, Earth Day, National Cat Day, Rivers’ Day, Cycle to work Day, National skip school Day, Travellers’ Day, National Centipede Day (OK, I made that one up, but it might exist, who knows?).

And then, of course, there are the big ones for which we have holidays, or, if not holidays, at least, parliamentary declarations. Last year our Member of Parliament attempted to get parliament to designate a Mennonite Heritage Day. (I don’t think successfully).

I’m not aware that my various professions have ever had a day designated for them. Shall I start a campaign to designate a National Rent 2 Own Day? Or does International Men’s Day suffice, covering all of my half of the population who do not otherwise have a day designated in our honour?

I’m not hurting though, because I have a better idea. I’m just going to designate every day as “My Day” and make the most of it.

How much of a property can you qualify for?

It surprises me how many inquiries and applications I get from people who want to own a home with low incomes. While I understand the desire, the dreams are sometimes far too grand. The reality is that you can only qualify for a home in proportion to your income.

The government sets the rules, through CMHC, specifying the maximum proportion of your monthly income that you are allowed to spend on housing, to qualify for a mortgage. “Housing” means your mortgage principle and interest payment, property taxes, an amount for utilities (usually $100) and, if it is a strata property, half the strata fee.

That ratio varies slightly, depending on your credit score and whether you have other outstanding debt. However, putting it all together, a rule of thumb is that you qualify for a property valued at about 4 – 4.25 times your gross annual income (based on 10% down and a 90% mortgage).

So, if you make $50,000 a year, you can qualify for property valued up to, perhaps, $210,000. An $80,000 annual salary will qualify you for up to about $340,000. To qualify for a $750,000 home, you would need an annual income of about $180.000. All these property values used to be about 20% higher before the government introduced their burdensome “stress test.”

So what kind of property will your income get you?

Well, in Abbotsford, for example, apartment condos start at about $180,000 and go up from there, townhouses at about $240,000 and single family homes at about $500,000. In Kamloops, those numbers are about $200,000, $280,000 and $350,000.

For those who throw up their hands in despair, declaring. “How can anyone ever afford to own in this part of the world?” we understand the challenge. In this area, wages have not risen proportional to the costs of housing; many people will never afford their own home.

We are bound by the same rules as the lenders. We cannot circumvent them; all we can do is “buy time” for you to get to qualification standards.

And that can benefit a lot of people.