Conditional Approval - New build mortgage

Redeagles wrote: ↑ Hi All,

Would having conditional approval for new build good enough to safeguard agaist any further mortgage rule changes in near future?

Closing date : May 2019

I have conditional approval from a major bank. Just want to make sure I would be safe with conditonal approval, with rising interest rates and mortgage rule changes.

Thanks.

You should talk to your lender. But I suspect that no, you’re not safe. If nothing else, they will only hold a rate for so long (180 days?). And if your conditions change or government regulations change...

C

is the mortgage only applicable for a 'new build'?

Redeagles wrote: ↑ Hi All,

Would having conditional approval for new build good enough to safeguard agaist any further mortgage rule changes in near future?

Closing date : May 2019

I have conditional approval from a major bank. Just want to make sure I would be safe with conditonal approval, with rising interest rates and mortgage rule changes.

Thanks.

Certain mortgage agents would do a rate hold for 12 months on new builds. Talk to your builder and they can refer their mortgage partner who can get you a 12 month rate hold. Rate will be a bit high for 12 months hold but its a safe thing to do just in case.
I got a 12 month hold for my new house in last Nov for 2.99 fixed.

My wife and I purchased a new build in Oct 2014 closing in June 2015. We had to deal with an in-house mortgage guy at a big bank to get a rate hold at the 12mo rate, but it allowed us the peace of mind to waive the financing clause. The second we were under 180 days, he updated the rate for us (the 180 day hold rate is much lower than the 12mo, we went from 3.69% to 2.99%) and we locked in for better still under 90 days (2.59%).

IMO, finding someone who will do the 12mo rate hold is the way to go rather than just counting on preapproval.

Depends entirely on what the conditions of the approval are. A conditional mortgage approval means that certain conditions have to be met before the mortgage application will be approved. What are the conditions in your case?

What would happen if the builder keep delaying and the closing time moved from 12 months to 20 months?

cec4111 wrote: ↑ Certain mortgage agents would do a rate hold for 12 months on new builds. Talk to your builder and they can refer their mortgage partner who can get you a 12 month rate hold. Rate will be a bit high for 12 months hold but its a safe thing to do just in case.
I got a 12 month hold for my new house in last Nov for 2.99 fixed.

Goggle wrote: ↑ What would happen if the builder keep delaying and the closing time moved from 12 months to 20 months?

Not sure about that scenario, better discuss with the mortgage agent itself. Mostly for the new builds 12 months is enough time. In case of condos and high rises it might take more time.

with B20 , lenders allowed for pre 2018 signed contracts to qualify on old rules.... so you might be ok if the gov decides on more rules, which I DOUBT they
will anytime soon....B20 was a big change....

Goggle wrote: ↑ What would happen if the builder keep delaying and the closing time moved from 12 months to 20 months?

Your current mortgage approval would expire and you would have to re-apply and you would be subject to any new rules or rates. This is a risk of buying a new build.