Real Estate

Do payments for a preconstruction impact mortgage eligibility?

  • Last Updated:
  • Jun 16th, 2019 5:52 pm
[OP]
Newbie
Jan 1, 2007
6 posts
Toronto

Do payments for a preconstruction impact mortgage eligibility?

Hi all,

Does investing in a pre construction condo, where payments are still going to be made over the next year , impact my mortgage eligibility overall if I purchase another house now?

Just wondering if pre constructions payments are considered an additional debt / liability from a mortgage approval perspective and lower the available mortgage room.

Thanks
1 reply
Deal Addict
Oct 25, 2008
2267 posts
279 upvotes
North York
cold.latte wrote:
Jun 16th, 2019 3:59 pm
Hi all,

Does investing in a pre construction condo, where payments are still going to be made over the next year , impact my mortgage eligibility overall if I purchase another house now?

Just wondering if pre constructions payments are considered an additional debt / liability from a mortgage approval perspective and lower the available mortgage room.

Thanks
I don't believe so. There is no debt yet as you have not closed and no property is under your name (i.e it is not possible to incur a debt without asset being exchanged). Also, there is no way bank can trace which pre-con you have put downpayment on.

Further to that point, this is why in condo investing it is not uncommon for people to buy 5-6 condos at a time with hope to flip them at a profit. This is because purchasing a pre-con condo doesn't even require you to qualify for a mortgage to begin with.

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