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 speedyforme |
Another Housing Question |
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Posts: 7376 (04/29/08 12:37 PM) Registered user |
OK so say I go to this showing this weekend for upcoming preconstruction homes to close next year summer. If I want to purchase now, how does the financing
work?
Do I put a downpayment? Is my mortgage approval done as of current or can it wait until next year as my affordability (income/downpayment savings) goes up? |
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JVL58 |
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Posts: 284 (04/29/08 12:47 PM) |
They will want earnest money up front and with builders it's non refundable. You will be qualified for you loan next year when it closes.
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bucking fitch |
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Posts: 905 (04/29/08 12:48 PM) Registered user |
When I bought, Speedy, I didn't have to put the down payment on until the closing date. It would probably be a good idea to have the pre-approval
available. If you sign any papers though, you will be legally reponsible to follow through on whatever the terms are.
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worstdog |
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Posts: 2767 (04/29/08 12:54 PM) Registered user |
If you have all these really basic questions - I'd say you're probably not really ready to buy. Go look, but do some more information gathering - not
with the idea that you're going to buy.
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hwamf |
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Posts: 1787 (04/29/08 12:54 PM) Registered user |
Not sure where you are, but where I am, the odds of the builder actually finishing the project for next summer would be in the 2% range.
Also, most builders around me require a down payment. Arranging financing that far in advance isn't necessarily required. Most mortgage companies won't give you a pre-approval for 15 months. That being said, finding out how much they will pre-approve you for will let you know how much money you've got to work wih, and what the approximate monthly costs will be. Check with the builder to see if they've arranged a sweet-ass mortgage rate for buyers. They often do. |
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RoMa |
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Posts: 35146 (04/29/08 12:56 PM) |
Speedy, go see a mortgage broker, and get pre-qualified. They are usually only good for a certain time frame afterward, but in case you like what you see, you
have additional weight to your offer, if you choose to make one.
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speedyforme |
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Posts: 7377 (04/29/08 1:36 PM) Registered user |
OK I am not so much concerned about a down payment as long as I am sure I want the house and of course the inspection and codes and paper work and lawyers and
home inspection aside
Aren't approvals good for longer periods if I buy a new house that isn't ready until later? I don't mind if the closing date moves later since it means I can change my down payment right? My biggest worry is that I cannot afford the house NOW but I can next year and I would rather get it now when the prices are lower since it has yet to hit the "public". |
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InDaNeck |
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Posts: 12 (04/29/08 1:46 PM) |
Speedy, I've bought pre-construction twice....once in FL, and once in MA, and it was different in each case. In both locations, you had to have a
pre-approval on your mortgage when you put any cash down (typically, about 1000 dollars). In Mass, once I paid the 'earnest money', I didn't owe
anything until the closing date, but in FL, I had to give them payments every couple of months (about 10k each time).
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speedyforme |
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Posts: 7378 (04/29/08 1:51 PM) Registered user |
^ Thanks, I am actually not too worried about the "rate" as here it doesn't rise as fast nor do I expect it to given our cuts, I am more
concerned about them approving my mortgage amount based on my income and downpayment, I mean my income will increase at minimum 6% next year and my savings
will be like $30,000 more so I'd rather get a mortgage next year, I just want to lock in the price now if I can
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JVL58 |
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Posts: 285 (04/29/08 1:52 PM) |
Sometimes for the upgrades along the way the builder will require you to pay a portion at that time, you may want to check on that if you don't have the
cash sitting around to pay for this stuff.
Don't forget all the after closing costs, like window coverings and landscaping! |
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ripeplum |
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Posts: 46 (04/29/08 3:11 PM) |
These days, at least in my area, builders are co-operating with Realtors. It would help you to have someone on your side representing you, to negotiate on
your behalf. It costs you no more and depending on the pre-sales it can save you money.
*************END OF USE A REALTOR COMMERCIAL************* Ask the builder for a copy of his offer forms and payment schedule. It has become customary for the builder to want a deposit up front, and have scheduled further deposits down the road depending on the upgrades you have chosen and the time frame for completion. Builders used to be notoriously late with finishing new homes and leaving people stranded but lately I have heard of homes being finished a month or 2 early. I think this is due to finding ways to work with the weather rather than shut down for the winter. There are even homes that are built in a factory that you would never know were built that way, one of the bigger companies just west of the GTA are doing it this way. Both mortgage brokers and banks can only give limited time pre-approvals based on todays information - who's to say what will be tomorrow. |
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speedyforme |
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Posts: 7380 (04/29/08 4:23 PM) Registered user |
So I might be screwed if I can't "afford" the house now even though I can later...
Luckily for me, I am still living at home so being stranded won't be the issue... |
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NickF227 |
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Posts: 2482 (04/29/08 4:31 PM) |
OMG speedy's buying a house. <3
I really think it's just common sense to wait until you're able to pay for it, right? |
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speedyforme |
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Posts: 7381 (04/29/08 4:37 PM) Registered user |
ugh I have a feeling I won't get an approval big enough to cover the cost of the home I want, if only these new homes came out 1 year later
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DownUpside |
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Posts: 88 (04/29/08 5:14 PM) |
I've heard that the market hasn't hit bottom yet. I think if you lock in a price now, you'll be mad in a few months when it's even cheaper. I
suggest you wait. In any case, given the current state of things (not likely to greatly improve before next year), you'll be more attractive to work with
when you're ready in every way.
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zippityboomboom |
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Posts: 6608 (04/29/08 5:21 PM) Registered User |
I'd wait until they were doing a closeout. They throw in a lot of incentives, and your house is more likely to get finished on time, because the builder
wants to get out of that area. You just have to make sure they aren't half-assing the job.
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speedyforme |
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Posts: 7382 (04/29/08 5:23 PM) Registered user |
Well I actually don't think homes in the GTA (Canada) are dropping anytime soon, not new houses anyway
damn and I got all excited too, well definitely next year I suppose |
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MMMadcow |
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Posts: 5842 (04/29/08 5:44 PM) Registered User |
zippityboomboom wrote: Zippity speaks the truth. We were offered many upgrades if we'd buy from the developers around here. Too bad I refuse to live in an associated area. Mortage brokers are worth everything they get. Ours has worked his ass off for us. Through all the garbage, he's been the one in our corner. I know he gets paid by the mortage company, but he sure seems to have our interests at heart. |
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JVL58 |
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Posts: 289 (04/29/08 6:39 PM) |
He get's paid by more than the lender, some of those fees on the closing statement are broker fees the buyer pays!
Damn, i wish everyone would just cheer up about this shitty housing market and buy a house, that would help change it! |
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MMMadcow |
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Posts: 5844 (04/29/08 7:48 PM) Registered User |
JVL58 wrote: Those fees are fees we'd pay anyway. We had them with the last house, too. And we didn't use a broker. We just had a shittier interest rate. Just doing my part to help out the shitty housing market. |
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ripeplum |
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Posts: 48 (04/29/08 9:28 PM) |
Americans can't seem to fathom that our housing market in Ontario is hot hot hot. Well priced homes in the right area are selling in days for at or over
asking. We so far are unaffected by what has gone on in the States. I know of a house that sold this week that 5 years ago would have been worth maybe 350 -
450...just sold firm in 3 days for 1 million even, even I shook my head in disbelief. This wasn't even in a big city, even our smaller cities and towns
are experiencing a huge jump in property values. Entry level in my city is around 200k and at that you get a really small house in a charming neighbourhood
but nothing special. Its actually a shame that people starting out can't buy anything decent under 300k.
Once a builder starts really getting going in a subdivision they start filling in the unsold lots with "inventory homes" These homes are mostly built but not completely finished. The builder then sells these and customizes the finishes. These homes are usually a bargain because the builder is ready to be finished with that particular development and just wants them sold. There is lots of wiggle room in the price of those homes. If your heart is set on a particular subdivision just wait it out, there will be lots to choose from when you are ready. |
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