What are the nuances of new construction 'Pre-construction' condos?
Pre-con condos have two closings: 'Occupancy' (you move in but don't own it yet, paying rent to the builder) and 'Final Closing' (you take title and the mortgage starts).
Lenders will provide a 'Rate Hold' but it often expires before final closing. Buyers must re-qualify at final closing, which is risky if rates have risen or their income has changed over the 3-5 year build period.
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Related Questions
How does mortgage insurance enable lower down payments?
Mortgage insurance lowers the risk for lenders, allowing them to offer mortgages to borrowers with down payments between 5% and 20%.
How will lenders evaluate my debt service ratios, and what key factors are considered?
Lenders assess your ability to repay the mortgage by calculating your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios.
What property considerations impact my mortgage application?
Lenders carefully assess the property's value and characteristics, directly influencing the loan amount you can secure.
How does the 'straight switch' exemption benefit you at renewal?
The 'straight switch' exemption lets uninsured mortgage borrowers move their mortgage to a new federally regulated lender (FRFI) at renewal without needing to pass the Minimum Qualifying Rate (MQR) .