Assignment 2: Home Financing

 Assignment 2
Home Financing It is now five years after graduating from Durham College with your Diploma.  Congratulations! What salary will you be realistically earning in your field?  In addition, imagine you have a partner, a spouse, or a significant person in your life that you wish to purchase a home with. What is their realistic income? You have a total of $ 50,000 in your combined savings account to fully or partially spend; as well as $10,000 each in your RRSP. It is now time to go house shopping! 

1.What is your job in your chosen field and what is your gross annual income?  Similarly, what is your partner’s job and gross annual income? Navigate to an online job bank such as Indeed.ca and provide URL’s AND screen shots of your chosen jobs in the appendix of your file submission. 

2.Find a home (townhome, semi-detached or detached house) to purchase in the Oshawa area listed between
       $ 300 000 – $ 500 000. 
       Pick one and share the link, as well as screen shots of your
selected property in your appendix.

3.Assume the listed price is the actual purchase price of the home. What is the minimum down payment you are required to make? Show your calculations. Explain how much of a down payment you are going to make? Are you going to make the minimum down payment or more?  Where are the fund$ coming from? What factors did you consider when making this decision? 

Note: Currently in the housing marketplace, homes are selling for significant amounts over listing prices. For the simplicity of this assignment you may use the listing price as the actual purchase price.  

4.Visit Canada Mortgage and Housing Corporation Based on your declared down payment in the previous question, calculate the premium % of mortgage loan insurance, and the actual $ dollar amount the high ratio mortgage loan insurance will cost.  What is the total amount of a mortgage you require including the high ratio mortgage default insurance? Explain alternatives or options you considered but did not pursue, and why not. There are no additional funds available beyond what is listed in the opening scenario.  

5.Visit any of the 5 major chartered banks in Canada (BMO, CIBC, RBC, Scotiabank or TD Bank) and select a five-year term with a fixed posted interest rate for your mortgage with an amortization period of 25 years. Calculate your monthly principal and interest payments using their mortgage calculator or the mortgage calculator from CMHC. DO NOT SIMPLY CUT AND PASTE a screenshot from the selected institution’s website. Create a table and explain every line listed.  

6.Put it all together and show your complete and final GDSR calculations. Would you be approved? Why or Why not?