Go Back   BuildingHomes.ca - Building your community! > General > Financing, Mortgages and Insurance

Financing, Mortgages and Insurance What options are best for you and your situation?


Reply
 
Thread Tools Display Modes
  #1  
Old 2007-10-19, 10:46 AM
three star three star is offline
Member
Regular User
 
Join Date: Oct 2007
Posts: 84
Default When to get the Mortgage with a new home

I was wondering when does one go about making a mortgage application for a home that will be built in August 2008.

Assuming one has enough cash to cover the $5000+$10000+$10000 cheques one has to sign when the contract is signed, does one make an application before one signs the contact and state that the money will be needed 8 months later? Will the $25000 be considered towards 25% of the down payment of the house when an application is made?

I spoke to someone at ING mortgage and they said something to the effect that unless you have 80% of your home built they will not give you a mortgage. I guess one can always wait for the home to be near completion and apply. I also called RBC and they seemed to be a bit taken aback when I said I was planning on buying a new home that will close in August 08.

Do you have to consult with the bank before you sign to get a nod from them that the property you are about to put down $25000 for will be worth giving you a mortgage on?

Any other suggestions on new home Mortgage?
Reply With Quote
  #2  
Old 2007-10-19, 11:01 AM
Nanners's Avatar
Nanners Nanners is offline
Senior Member
Regular User
 
Join Date: Sep 2007
Location: Ontario, Stittsville
Posts: 1,674
Default

I would start looking for a pre-approval. Normally, you can get a Pre-Approval 4 mths to your closing and lock the rate in. If the rate goes up, then you still get the rate it was locked in at. If the rate goes down, you get the lower rate. But with Mattamy, they had 2 RBC Mortgage specialists that offtered pre-approvals 18 mths before your closing to lock a rate in. Pre-approvals are basically saying how much you can afford. It's one step before the mortgage.

We got a pre-approval because we thought it was needed but Mattamy never even asked for it. But it was also great to know what we could and coudln't afford when we were looking at houses.
__________________
Amherst | Jackson Trails | Progress Thread
Reply With Quote
  #3  
Old 2007-10-19, 11:17 AM
north59 north59 is offline
Senior Member
Regular User
 
Join Date: Jun 2007
Location: Ottawa
Posts: 354
Default

We went to get pre-approved after we reserved our lot, during those 5-7 days when you put your $1,000 down.

Tamarak asked for the pre-approval before we gave them over the larger cheques. We also wanted to get pre-approval out of the way to determine what monthly payments we would have depending on the amount of upgrades. Interest rates were low when we got pre-approved and went up over those 6-9 months during the build, so we were pretty happy.
Reply With Quote
  #4  
Old 2007-10-19, 10:34 PM
GregS's Avatar
GregS GregS is offline
Administrator
 
Join Date: Sep 2003
Posts: 4,183
Default

Not sure I understand here.. You are buying a production home or a custom home?

If a production home, then you will actually need approved financing when you submit the signed purchase agreement. You give your builder deposits, they build the house, and on your closing day all the moneys change hands between all the parties.

If a custom home, do you own the lot now? If you are contracting someone to build a custom home, that's when you need a lot of money. Because then the financier is funding the construction of the home.

A finished home is collateral towards the mortgage loan. It can be sold in order to collect the outstanding debt.

An unfinished home is worth as much as the land is worth.
This is why if you cannot afford to fund the majority of it yourself, getting financing will be difficult.
__________________
--
We do everything for
Audio - Video - Data - Security
For Your Home - For Your Condo - For Your Office

http://www.phand.ca/
Reply With Quote
  #5  
Old 2007-10-20, 10:43 AM
BiggieG's Avatar
BiggieG BiggieG is offline
Senior Member
Regular User
 
Join Date: Mar 2007
Posts: 644
Default

He/she said he/she is depositing 5k 10k 10k so lets assume its a "production" home...

You may also be able to get a preferred rate from your builder. I was skeptical at frist but we were able to lock in our fixed rate a year before our closing and the rate was better than anything our broker could match (actually, I think our broker was a little miffed...)
__________________
Chapman Mills
Minto Piccadilly A
Closing June 26
Reply With Quote
  #6  
Old 2007-10-20, 04:16 PM
fuzzywuzzy fuzzywuzzy is offline
Senior Member
Regular User
 
Join Date: Nov 2006
Location: Fairwinds Phase 1
Posts: 116
Default

Quote:
Originally Posted by GregS View Post
If a production home, then you will actually need approved financing when you submit the signed purchase agreement.
We bought a production home and I can't recall them having asked for proof pf pre-approval (although we allready had). The only time we were asked was when we purchased our upgrades and they wanted to see the pre-approval amount.
__________________




Queencliffe Corner Elevation B
Mattamy Fairwainds Phase One
Reply With Quote
  #7  
Old 2007-10-21, 06:17 PM
mlee mlee is offline
Junior Member
 
Join Date: Oct 2007
Posts: 8
Default

Could someone explain how interim financing works? I'm possibly interested in purchasing, but don't have $25k in the bank to write deposit cheques... can I borrow that against my existing house, or does the bank open a second mortgage for that (and if so do I need to make payments on it before I close). I'm looking at HMB with a spring 09 closing, can I have two mortgages for that period of time or am I expected to have cash on hand for the deposit? Thx
Reply With Quote
  #8  
Old 2007-10-21, 06:44 PM
GregS's Avatar
GregS GregS is offline
Administrator
 
Join Date: Sep 2003
Posts: 4,183
Default

Borrowing money will count towards your debt. The more debt you have the less money you will able to borrow for a mortgage.

Contact your financial institution to better go over your options.
__________________
--
We do everything for
Audio - Video - Data - Security
For Your Home - For Your Condo - For Your Office

http://www.phand.ca/
Reply With Quote
  #9  
Old 2007-10-22, 10:43 AM
mlee mlee is offline
Junior Member
 
Join Date: Oct 2007
Posts: 8
Default

I will definitely be calling my bank; I was just curious as to what the 'norm' is -- refinancing the existing mortgage or opening a new loan.
Reply With Quote
  #10  
Old 2007-10-22, 02:40 PM
SW20 MR2 SW20 MR2 is offline
Senior Member
Regular User
 
Join Date: May 2006
Location: Markham, ON
Posts: 184
Default

The builder will generally work with a "preferred" bank/rep that will guarantee a rate right through to closing. You can get pre-approval from them and then use this as your worst case scenerio. Most lenders will only guarantee a rate for 90 days, so when you get close to closing, shop around again.
Reply With Quote
Reply

Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Mortgage/Life and Home Insurance questions canabiz Financing, Mortgages and Insurance 17 2007-06-05 10:13 AM
RBC Mortgage mavoledo Stouffville - Mattamy On Main and WheleríS Mill 10 2006-08-29 01:06 PM
Mortgage Rates New Home Guy Chit Chat 9 2006-02-24 12:22 AM
Mortgage Rates mortgagehockeymom Home Owner Tips, Upgrades and Maintenance 2 2005-07-21 04:23 PM



All times are GMT -4. The time now is 10:46 PM.



Copyright © PHAND Corporation
This document may not be used elsewhere without the expressed written consent of PHAND Corporation.
*** There is no association between this website and any builder. ***

Powered by vBulletin® Version 3.8.10
Copyright ©2000 - 2019, vBulletin Solutions, Inc.