[Klieg]

Hi all. I'm currently looking into buying my first place, learning as I go, but I have a few questions about purchasing a condo in the pre-construction phase.

I gather that there can be a gap of several months between occupancy and when a building is registered, but you have to wait until registration before your bank will give you a mortgage.

Being something of a pessimist, I have to ask: What happens if circumstances change enough in the meantime (ie. you lose your job, or the economy tanks even further than it has already) that at registration your bank is unwilling or unable to lend you as much as you require to close the deal? Would the buyer lose their entire deposit with the builder, or are there other options available?

One day I'm sure I'll have this all figured out

 

[Josef]

To be honest, I'm not exactly sure, but I'm confident they wouldn't be able to take all of your deposit. In the unlikely event that you run into that situation, perhaps you can sell your suite to someone. Your best bet is to get a pre-approval first and then make sure you save every shiny penny for that down payment. There's nothing to feel anxious about Klieg. You'll be fine, just work hard, cut down on expenses (eg cancel cable for free antenna reception ) and save.

Respectfully,
Josef

 

[Klieg]

To be honest, I'm not exactly sure, but I'm confident they wouldn't be able to take all of your deposit. In the unlikely event that you run into that situation, perhaps you can sell your suite to someone.

I guess it's the "chicken & egg" scenario that has me concerned. You can't sell your condo until you own it, but you might not get to own it if the deal falls through at registration time. Would the builder give you enough notice before the condo is registered for you to seek out an alternative (ie. assignment) if things don't work out with the bank?

Your best bet is to get a pre-approval first and then make sure you save every shiny penny for that down payment.

I've been pre-approved, so I have a reasonable idea of what I could afford. I suppose I've always been pretty cautious about financial matters, so the concept of committing to purchase from the builder without being guaranteed a loan to back it up a year or two from now seems alien to me

There's nothing to feel anxious about Klieg. You'll be fine, just work hard, cut down on expenses (eg cancel cable for free antenna reception ) and save.

Excellent advice. Thanks for your help, Josef!

 

[Josef]

I guess it's the "chicken & egg" scenario that has me concerned. You can't sell your condo until you own it

I believe you can get someone to take over your place (even though you don't fully own it), but you would be charged a certain amount of money from the builder? I'm not entirely sure what happens in that scenario. It's great that you're looking at every scenario that can happen, but don't let it hold you back. What type of job do you possess? Do you have a decent amount of funds in your RRSP? How about family support? These are things to consider in case something would unlikely occur.