Real Estate

Conditional Approval - New build mortgage

  • Last Updated:
  • Jun 3rd, 2018 3:21 pm
[OP]
Newbie
Feb 10, 2018
32 posts
2 upvotes

Conditional Approval - New build mortgage

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.
9 replies
Deal Guru
User avatar
Mar 23, 2008
13006 posts
9968 upvotes
Edmonton
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
Deal Addict
Dec 17, 2013
1489 posts
980 upvotes
CALGARY
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.
Deal Fanatic
Nov 24, 2013
6276 posts
3036 upvotes
Kingston, ON
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.
Deal Fanatic
Jan 15, 2017
5312 posts
5433 upvotes
Ottawa
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?
Member
May 13, 2007
306 posts
54 upvotes
Toronto
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.
Deal Addict
Dec 17, 2013
1489 posts
980 upvotes
CALGARY
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.
Deal Addict
Jul 3, 2007
4090 posts
4566 upvotes
Toronto
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....
Deal Fanatic
Jan 15, 2017
5312 posts
5433 upvotes
Ottawa
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.

Top