Purchasing a presale home from a floorplan creates a distinct difference on how to prepare for a mortgage. Two questions I often get asked are “when should I arrange the mortgage” and “when do I start paying for my mortgage.”

At all MAC projects, we have access to mobile mortgage representatives, often from larger financial institutions such as TD Canada Trust or RBC. These financial advisors are able to assess your current ability to borrow money, often granting you a mortgage “pre-approval.” A couple of weeks ago, I addressed rate cap programs which allow you to hold a mortgage rate based on today’s rate — even if you won’t start paying on a mortgage for some time. As mentioned, I strongly recommend arranging your financing at the time you write a contract on your presale home. This includes going through the approval process and having a good understanding of what your costs will be when you complete, sometimes up three years later! You can speak to any financial institution, or an on-site mobile mortgage representative for more information.

So when do you start paying?

The presale of a home requires a deposit but not a mortgage payment. Therefore, you will not start paying your mortgage until you actually complete on the home which means title is transferred and the bank transfers the purchase price (minus your deposit amount) to the developer.

As every development is different with respect to deposit and construction timelines it is important to understand what works for you. When making a purchase as large as a home, you need to have your financial ducks in a row. Make sure you understand how much deposit is due and when and ensure you can manage the installments as well as your eventual mortgage payments. Again, this is something that your mortgage specialist, bank and even our sales representatives can help you with.

Shop and compare what different banks will offer — then buy with confidence knowing you have all bases covered.