Pre-sale properties are brought to the market by the developer before the properties are built. Clients can put deposits down to contractually buy the rights to the property.
During the "cooling off" stage our clients come to us for support in qualifying them for the mortgage. This provides the client and developer with the confidence that the client has the ability to fund the purchase when final registration occurs.
TWT is able to submit the mortgage application at the time the client contractually buys the property and approve the mortgage prior to the end of the cooling off period. We provide the approval on lender letterhead to both the client and developer to firm up the purchase.
Typically, during occupancy, we will review the file again with the client to ensure all conditions have been met in preparation for final closing and review current market terms and conditions in preparation for closing the property and registering the mortgage.
Depending on the lender, some will allow us to finance against the current market value of the property compared to the purchase price, if it has gone up in substantial value.
In our clients case we had multiple clients purchase through the same developer. We approved all the mortgages at time of contract, managed the file from contract through final closing and with lower rates in the market negotiated a combination of variable rates in the 1.25% range and fixed rates in the 2.24% range. Since we had a relationship with both the developer and the sales team we were able to assist some other clients that were struggling with their approval and fund their mortgages in the alternative markets. This allowed them to close without forfiting their deposits and appreciation and then sell the property post funding or rent it out to cover the cost of the mortgage and we will refinance in 6 to 9 months.