Purchasing a pre-construction condo carries a plethora of benefits, regardless of whether it’s an existing tower, or a new one. As we speak, condominium prices are generally more affordable than traditional townhouses, while also being maintenance-free, with a number of beautiful on-site amenities.
“Generally speaking, the positives of condo living certainly outweigh the negatives. But what many don’t know is that purchasing a new condo has a number of additional benefits that can’t be overlooked as well, such as the opportunity to create your own space, equipped with all of the finishes, vanities, and decorations you desire.”
We understand the added sense of luxury acquired once you reside in a condominium, but we find it imperative that you know some important facts before purchasing a pre-construction condo.
The Initial Cost Up Front Standard home or condo mortgage purchases only require a 5% down payment, and to avoid paying mortgage default insurance, it is encouraged to increase that down payment to 20%
. When an individual looks to purchase a pre-construction unit, it is standard practice that you put down a minimum 15-20 percent of the unit’s purchase price.
Thankfully, that price is not required in one lump sum, but can be made in instalments until the closing date, starting at 5%. Expect Delays First rule: Don’t be surprised when delays occur. The goal of a realtor is to ensure that everything is completed on the initial closing date, but due to an assortment of unprecedented factors, that may not always be the case. Try not to be disheartened when the closing date is pushed back. Have a plan set in place just in case the development cannot be completed on the original date.
Although the building may not be completed, there is still a chance that you may be able to move in, but if that occurs, the builder will still be on the title of your property, and your mortgage payments will be registered as rental payments as a result. Locking in at current mortgage rates is possible if you desire to buy a pre-construction condo that won’t be completed for a number of years, you have the capability to purchase it at a good interest rate, not having to wait until the interest rates of the time of the completion date. If you find that you qualify for a mortgage today, and you are satisfied with the interest rate provided, you may be able to lock into the current interest rate.
Cancellation is a Possibility The truth is, not every condo development comes to fruition, and this can be for a number of reasons. But don’t fret, because government organizations such as Tarion are put in place to help guard individuals desiring to buy new homes.
With safeguards set up such as deposit warranty, and numerous reimbursement options, Tarion ensures that buyers are properly protected. It is imperative that as a home buyer, you are working with an experience real estate agent who can give you detailed information on any and all potential drawbacks that can occur when purchasing a pre-construction condo.