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Demonizer
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Bank mortgages, not bags of cash, behind mainland Chinese ho

Tue Nov 03, 2015 2:52 pm

Bank mortgages, not bags of cash, behind mainland Chinese home buys: study

Vancouver study shines new light on the role financial institutions play in the B.C. home-buying process


Read more: http://www.vancouversun.com/business/ba ... z3qTHziGBT

http://www.vancouversun.com/business/st ... #f1665d17f
 
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WhipMaster
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Re: Bank mortgages, not bags of cash, behind mainland Chines

Sat Nov 14, 2015 5:28 pm

Quote from the article:
“It was pretty startling. This notion of people showing up with a big bag of cash isn’t really so much the case,” says Eby. “We have homemakers and students listed as buying $2-million to $3-million homes and qualifying for the mortgages.”

I tell you why this is misleading..... A lot of these people are business people who actually do have the cash. But their reasoning for taking out the first mortgage is, "why not borrow on the house at 3% rather than use my own cash which I am getting a much higher return on?"...make sense?

Plus, there's no way in hell a homemaker or student is going to qualify for any type of mortgage on their own.
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jesse1
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Re: Bank mortgages, not bags of cash, behind mainland Chines

Sat Nov 14, 2015 9:56 pm

The study by Yan raised a stink because the financing so obviously smells. Bad.

Still, the little voice in my head says, take the money while there's money to be taken. It's a big city and country. Plenty of room for everyone, though perhaps not close to UBC harharhar :mrgreen:
There is no shame in overpaying
 
rofina
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Re: Bank mortgages, not bags of cash, behind mainland Chines

Mon Nov 16, 2015 7:56 am

Quote from the article:
“It was pretty startling. This notion of people showing up with a big bag of cash isn’t really so much the case,” says Eby. “We have homemakers and students listed as buying $2-million to $3-million homes and qualifying for the mortgages.”

I tell you why this is misleading..... A lot of these people are business people who actually do have the cash. But their reasoning for taking out the first mortgage is, "why not borrow on the house at 3% rather than use my own cash which I am getting a much higher return on?"...make sense?

Plus, there's no way in hell a homemaker or student is going to qualify for any type of mortgage on their own.

Whipmaster is right.

Most business owners can attest to, its all about keeping funds in the business to keep taxes low, business liquid, and find creative ways to obtain lending. Asset based, etc.

The issue here is obvious, if RBC and other are lending on the value of assets in China, how do they intend to claim the collateral in the event of a loan going sour?

Particularly with China, the rates there remain much higher. A mortgage of 3% is easily offset by keeping the money in low risk, low yield investments.

Add to this the bonus of CAD being 30% cheaper, why not take out a mortgage?
 
 
oli
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Re: Bank mortgages, not bags of cash, behind mainland Chines

Mon Nov 16, 2015 11:03 pm

I wonder if signing up with the banks here help take $ out of China.

http://www.bloomberg.com/news/features/ ... ney-exodus

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