Buying a property may be the most important investment decision of your life. That’s why it’s important to be thoroughly informed every step of the way. By coming to a presale event prepared, you know that you’ll get everything you’re looking for in a new condo! Here’s a list of the key steps involved in purchasing your dream home.
1. Determine your borrowing capacity
Your borrowing capacity is the maximum amount you can borrow to buy your condo. This is where the rubber hits the road – it clearly shows how much you can afford when buying a new home.
To calculate your borrowing capacity, your financial institution will need to know your income and monthly expenses. The difference between these two numbers gives you the margin you can use to finance your property. For all intents and purposes, this represents what you have left in your pocket at the end of the month.
Your borrowing capacity will be calculated using this margin, after deducting the down payment (how much of your nest egg you’re willing to put down).
2. See if you qualify for financial assistance
Did you know that starting June 1, 2018, the City of Montreal is updating its Home Ownership Program to offer eligible home buyers a lump sum grant of $5,000 to $15,000? New properties that meet energy-efficient or sustainable construction standards, such as the Novoclimat program and LEED certification, are also eligible for subsidies and rebates from certain insurers.
3. Make a presale appointment
When developers announce a new real estate project, they often need funds quickly to get things off the ground. By buying a presale, or “off-plan” condominium, you can often get a great price. If you’re interested in a sought-after development, book an appointment with the developer early to reserve your unit – and don’t forget your cheque book.
You’ll generally have to put down a deposit between $1,000 and $2,000 refundable during a 10 days period, giving you those 10 days to secure a mortgage.
4. Pre-qualify for a mortgage
Now it’s time to start shopping around for the best mortgage rate and choose the financial institution you want to take your business to. For a new condo development, it may take several months before you go to the notary’s office and take possession of your property. Your lender can generally lock in your rate for a set period of time. If the market is cooperative, your rate might go down before you finalize your mortgage, 3 months before taking possession of your condo.
5. Sign the preliminary contract with the developer
Once you’ve pre-qualified for a mortgage, you have another 10 days to meet the developer and sign the contract. For a new condominium development, it’s the moment that you’ll have to pay the 5% deposit of the total price. It will be deducted from your final payment to the notary when you sign the notarial deed.
The big countdown
- 3 months before construction is finished, you’ll be given a tentative date for taking possession of your unit.
- 3 to 4 weeks before delivery, your notary will begin preparing the deed of sale.
- Shortly before the delivery of your condo, you’ll be invited to perform a final inspection of your unit with a representative of the developer.
- Once the notarial deed is signed, you officially become the owner of your very own condo.
Welcome to your new home!