Homebuyers considering a property that’s still under development should realize that securing mortgage financing on a presale home is a bit different from buying an existing property. Construction often takes longer than the builder expects, so buyers need to be flexible in their housing needs, and lenders typically will not hold your mortgage rate until the property is completed (and if they do, it’s often not the best interest rate).
However, buying a presale could work to your advantage if the value of the property appreciates by the time construction is completed, and buying before completion often gives you the chance to work with the builder to choose the finishes and fixtures you want. It can also buy you to time improve your credit or boost your income so that you can qualify for a mortgage.
In her latest post for REW.ca, Atrina Kouroshnia of Lavarates explains what buyers need to know about financing a presale home. Here’s an excerpt:
Rules change all the time, and this create uncertainty with qualifying for a mortgage. In addition to changes in the mortgage world, personal life changes such as unemployment, breakups and credit score issues can affect financing.
Click on over to REW.ca to read the piece in its entirety.