Recently I sat down with Daniel Char, a mortgage broker who helps real estate buyers get mortgage financing. We talked about a lot of things that home buyers should be aware of, including some risks and rewards of buying pre-construction homes.
The Reward: When buying a pre-construction home, you’re typically required to put down a deposit of around 20% of the purchase price, and the builder is contractually required to provide occupancy of the home within a few years. If the housing market keeps on rising, by the time the home is completed the fair market of the home may be more than the purchase price.
The Risk: Of course, the housing market does not always go up. There is a risk that the fair market of the home is less than the purchase price when the builder finishes construction and requires you to complete the closing of the property. That’s when having a mortgage broker like Daniel can help you get the mortgage financing that you need to complete the purchase.
Check out our full conversation here: