Here’s a nice handy dandy Maximum Mortgage Calculator:

http://tinyurl.com/ygjg4rf

Don’t forget that under slot #5, you enter the total monthly amount of all existing loans and mortgages that are or will be registered against the property you are financing/buying. For example: Your HELOC against your first property.

Please do factor in the payments you will need to repay your RRSP deduction.

If, after this, you find you can actually afford to carry both properties, use this Mortgage Calculator (http://tinyurl.com/yzuzcf4 ) to help you run different interest rate scenarios when you refinance. If you are not *comfortably* able to afford your monthly payments over a reasonable term (say, 25 years) @ at least a historically average interest rate (say, at least 6-8%), then you might want to rethink whether of not this is a good idea. Remember, although your monthly payment is lower with a longer amortization, this results in much higher interest costs over the term of the mortgage. You can run these scenarios on the calculator too.

I’m not sure what you do for a living or whether or not you have a partner, but please do remember that job loss, accidents, and divorces can and do happen. Plan for these contingencies if you can. Also remember that it can be difficult to find and retain good tenants, and they may cause damage to either or both properties. You might want to plan for this, too.

My, aren’t we all pleasant and helpful on this site! Much better than some other sites I’ve heard about.

Personally, if it were me, I’d pay off whatever high interest debt you have, apply the balance to your current mortgage, and use the rental income to pay down your mortgage early. In 3-5 years you can easily have over 50% equity in your home. That same $400k house could be worth $300k in several years time, too. Leveraging is generally only a good idea when you have the cash/equity to do so (and by that, I mean mortgage free).

“Should I buy now, possibly sell it when it is done in 5 months, keep it, not buy it, or wait until the market fixes itself.”

Yes, for sure!

“I will not have a lot of extra cash flow for the next year or so, as long as everything goes good and is all rented out.”

Sounds like a bit of a drag if “everything goes well.” What if everything, or at least something doesn’t go well?

Frankly, I expect that anyone here who would have much advice probably chimed in on the link in Jeremy’s comment.

Best wishes.

Jeremy,

I couldn’t help notice the similarities myself, but I don’t think it’s Peter or our regular Jason. This comment comes from an IP I haven’t seen before at least since I switched to WordPress four or five months ago.

I am buying direct from builder.
Should I buy now, possibly sell it when it is done in 5 months, keep it, not buy it, or wait until the market fixes itself.
The rest of my money for my downpayment is coming from a secured line of credit on my current house. I plan out renting my current house as well as the basement suite to the new house.
I will not have a lot of extra cash flow for the next year or so, as long as everything goes good and is all rented out.

I agree it’s pretty weak. Apparently, some Sobey’s 5.8km from your house is your best option for a major grocer. I can tell hardly anyone uses this feature or I might be inclined to make a bit of a stink with my provider. It’s not something I can just turn off.

Yesterday, they had listings rigged up with some other “in your neighbourhhood” software that had a much more prominent location. My listings were showing up in the neighbouring area and they all showed “0 schools.” I did manage to get them to turn that off for me.

I live one block from a major mall. One of the reasons I chose my house was because it was within easy walking distance of everything I would need in that mall — including a grocery store, drug store, etc.

Walkscore tells me that my house is a “Somewhat Walkable” with a score of 64, but the reasons why it gives me this score are insane. It says:
- There are no buses running near my house, despite having a transit hub at the mall.
- That I should shop at a gas station food store (.64 km) rather than the actual supermarket in the mall (.2 km).
- That I should get coffee at some place .8 km away instead of the Tim Horton’s that is literally across the street.
- That the nearest bar is 1 km away, as opposed to the one in the mall. (and that’s not even counting the LBS in the mall!)

(Norm, you know where I live – plug it in and see what I’m talking about!)

Even this is an improvement over my score of 37 (which is what it was the last time I looked), when it was telling me that the nearest library was across town, the nearest drug store was about a kilometer, and the nearest grocery store was a Safeway 3.5 km away!

I found ‘walkscore’ in the first place based on the links in your listings, Norm… but if it is going to be so wildly inaccurate then you may seriously want to reconsider any affiliation with it.

Thanks for the feedback. I think it will be a great tool. Nice to be able to take a virtual walk up and down the street.

My favorite find on “Street View” was picked up in the Twitter stream of @nheagy, computer programmer, local artist, and founder of Fear Salesman who loaded his car with gear in hopes that he might encounter the Google Street View camera car. Well, he did, and this is the result.

but seriously, great resource that will help out alot of people, myself included.