What do I need to lock into a new condo project?

[88CRX]

What do I need to lock into a new condo project?

5% down payment and that’s all? Or can I even put less down to lock in? When I put that money down is it my down payment or simply a deposit to hold the unit for when it’s built?

Sorry for the noob questions lol but thanks!

[benyl]

it is a downpayment on the total price. It is usually 5% with a pre approval from your bank. Some places want 15%. It is all dependant on the developer.

[Tik-Tok]

Originally posted by benyl
it is a downpayment on the total price. It is usually 5% with a pre approval from your bank. Some places want 15%. It is all dependant on the developer.

Ditto, but if you don't even have the 5%, you can look at no-downpayment mortgages (a couple banks have them, Royal for one), all you need is 1.5% of the total for "closing costs" (eg, lawyer fees, etc.)

[88CRX]

Originally posted by Tik-Tok


Ditto, but if you don't even have the 5%, you can look at no-downpayment mortgages (a couple banks have them, Royal for one), all you need is 1.5% of the total for "closing costs" (eg, lawyer fees, etc.)

Ok, so when would your mortgage payment start?

at time of down payment or time of completion of project?

[Tik-Tok]

Originally posted by 88CRX


Ok, so when would your mortgage payment start?

at time of down payment or time of completion of project?

What ever day you've agreed upon, banks don't mind if you start early, but usually it's after you've "taken possession" of the property, as in it's ready to be moved into.

[HRD2PLZ]

I don't think most developers would take a 0 down mortgage. Most of them are looking for a "cash" deposit (minimum of 5%) and a mortgage approval letter from your lender. Some of them don't require a mortgage letter with a "cash" down payment of 15% or more. Your best bet is to check with the developer to see what amount they would need for a deposit.

[Weapon_R]

Some condos require a small initial deposit (refundable for a very short period of time) and then the downpayment quickly after. Make sure you get preapproved before you shop because things can turn ugly really quickly if you can't find financing when the time comes.

[Tik-Tok]

Originally posted by HRD2PLZ
I don't think most developers would take a 0 down mortgage. Most of them are looking for a "cash" deposit (minimum of 5%) and a mortgage approval letter from your lender.

Actually what a no-downpayment mortgage is, is a pre-mortgage loan to pay for the downpayment. For years banks have offered 5% cashback when you take a mortgage with them, some of them finally figured out, "hey, why don't we just front new homebuyers the money to pay for the downpayment in the first place!"

So it's just a loan they tack onto your mortgage. You'd actually have to call both the bank, and developer to see if you can work it this way. But if you're serious about buying a place, and don't have the money right now, it's a good investment with the way property is skyrocketing right now.

[HRD2PLZ]

Originally posted by Tik-Tok


Actually what a no-downpayment mortgage is, is a pre-mortgage loan to pay for the downpayment. For years banks have offered 5% cashback when you take a mortgage with them, some of them finally figured out, "hey, why don't we just front new homebuyers the money to pay for the downpayment in the first place!"

So it's just a loan they tack onto your mortgage. You'd actually have to call both the bank, and developer to see if you can work it this way. But if you're serious about buying a place, and don't have the money right now, it's a good investment with the way property is skyrocketing right now.

Uuuhhh thanks, I have sold a few properties with clients using 0 down mortgage.
What I meant was, any developer I know would want an actual deposit. If it is possible, it could be a good way for someone to get their foot into the market.

[D. Dub]

Originally posted by HRD2PLZ


Uuuhhh thanks, I have sold a few properties with clients using 0 down mortgage.
What I meant was, any developer I know would want an actual deposit. If it is possible, it could be a good way for someone to get their foot into the market.

You're right..in this market a developer would not likely take a 0 down mortgage approval as security for a lot.

[benyl]

0 down mortgages are playing with fire.

the following is not directed at the thread starter, but readers of this thread:

If you can't afford to put at least 5% down, you have no business buying a house. Sell your car, sell your TV, etc to come up with the money. Otherwise rent.

[88CRX]

Originally posted by benyl
0 down mortgages are playing with fire.

the following is not directed at the thread starter, but readers of this thread:

If you can't afford to put at least 5% down, you have no business buying a house. Sell your car, sell your TV, etc to come up with the money. Otherwise rent.

Ya, I dont plan on putting zero down.

However.... I wasnt planing on getting into the market for 6-12 more months from now. But the sooner the better right?

[tjtd00]

get in as soon as you can, lets put it this way, I bought my condo sept 2003, moved in on completion mar 31/04. purchase price $129,000 including upgrades, appraised last week at $225,000 95k in 2 years!!!!! swing it as fast as you can as prices arent going down for a while yet

[Tik-Tok]

Originally posted by benyl
0 down mortgages are playing with fire.

the following is not directed at the thread starter, but readers of this thread:

If you can't afford to put at least 5% down, you have no business buying a house. Sell your car, sell your TV, etc to come up with the money. Otherwise rent.

Horsesh!t pure and simple.

For us:

Cost of renting our place we're were at while trying to save downpayment, $1100/month. Time it would have taken us to save $10,000 (for our $200,000 house), 2 years. Amount of money IN SOMEONE ELSES POCKET while saving downpayment, $24,600 .

House value now (2 years later) $340,000, so we'd have to ANOTHER $7,000 to afford the same house.

You sir, have no clue what you're talking about, and if you are in the business, you have no right to be.

[broken_legs]

[Tik-Tok]

Oh, and I should add too, cost of the extra $10,000 on the mortgage, $18,500 over 25 years as opposed to the extra $140,000 (or $260,000 over 25 years @ 5.65%) it would have cost us to buy this house.

If we lived in a stable market, sure it would make more sense to rent, but with the market going up exponentionally, you can't lose with a no-downpayment (assuming you have a stable career/job)

[D. Dub]

There's nothing wrong with zero down mortgages... they benefit a lot of people who have not been able to save a down payment because of education or family or other commitments... you get the equity lift and thats much better than paying rent for another year or two.

[88CRX]

Originally posted by D. Dub
There's nothing wrong with zero down mortgages... they benefit a lot of people who have not been able to save a down payment because of education or family or other commitments... you get the equity lift and thats much better than paying rent for another year or two.

Yea, so what would the drawbacks be to a zero down mortgage be? What problems could I run in to?

[Tik-Tok]

Originally posted by 88CRX


Yea, so what would the drawbacks be to a zero down mortgage be? What problems could I run in to?

Well, in your circumstance it may not work, a developer of a condo unit might want to see hard cash. You should talk to both a bank, and a condo developer about it. But if you're buying a premade condo, or house, it's only flaw is that you have to take the posted rate, instead of getting a bargain (right now it's 6.75% I think, and if you had the actual cash, you could probably get low 5's)

[D. Dub]

Originally posted by Tik-Tok


Well, in your circumstance it may not work, a developer of a condo unit might want to see hard cash. You should talk to both a bank, and a condo developer about it. But if you're buying a premade condo, or house, it's only flaw is that you have to take the posted rate, instead of getting a bargain (right now it's 6.75% I think, and if you had the actual cash, you could probably get low 5's)

That pretty much sums it up.