Very often with new builds or pre-construction homes, a mortgage can be easier to acquire. Why? It has to do with insurance. If the property you’re interested in happens to be a condo, insurance is usually a mandatory element. Neither the condo association nor the lender will permit a buyer that doesn’t have insurance. In most cases home insurance is an absolute requirement. No insurance, no mortgage. With new builds, insurance is easier to get, and thus, so is a mortgage.
Mortgages can sometimes be easier to get when you go through the builder’s financing department, as opposed to using lenders like banks. This is because it is usually in the builder’s best interest to place as many people as possible into their newly completed homes. On new homes, you can also get away with putting down a lower down payment as well, sometimes only 5%. Insurance costs will also tend to be lower as well, since new homes will tend to be built with newer, safer materials and built to conform with higher, more modern standards.
With a newly constructed home, you stand a higher chance of being able to acquire a home much closer to what you want in terms of design choices.
Whereas with older homes, you have to take them as they are, very often if you are buying brand new (or have put a down payment on an as-of-yet unfinished build), you’ll have the opportunity to choose one that is exactly to your liking. That means you’ll get that nice view, the right material for the kitchen countertops, the walk-in bedroom closet you need, or the stylish and functional bathroom you’ve always wanted.
New homes are also usually more energy efficient since they’re built to more modern standards. They also tend to have better materials, up-to-date appliances, and the latest technology.
Renovations are only necessary when something is broken, dangerous, or the design needs to be updated. With a new build, you’ve already chosen the design. Because there is a much higher chance that you’ll have purchased a home exactly as you want it, there will obviously be less need for design updates.
And because a newly built home is exactly that - new - there is a much lower chance of it needing repairs. Older homes can have mold, electrical or plumbing issues, need a new roof, or have cracks in the foundation. This is true whether it is a condo located near the city-centre, a four-bedroom house in the suburbs, or something in between.
Buying new can also help you avoid the potential pitfall of a home inspection gone wrong. We’ve all heard the horror stories of friends buying a resale home and having it inspected, only to find out later that the inspection missed something very significant and very costly.
And in the rare case that your newly-built home needs a significant repair in the first few years, there is a good chance that any repairs could be covered under the warranty.
• Room for bargaining is limited.
• Due to higher specs, New Builds can be more expensive and so will be the property taxes.
• If construction is delayed the locked-in pre-approved mortgage rate could be lost.
• Change in partners credit could jeopardize the the mortgage.
• Limited selection compared to older homes, limiting life style in mature neighbourhoods
As far as mortgages are concerned, especially for pre-construction homes that may experience delays in their expected completion dates, speak to your lender about adding what is called a “rate hold.”
For a small fee, you can get up to 12 months of guaranteed approval, meaning you won’t have to worry about renegotiating a mortgage agreement if there is a slight delay in delivery.
That said, our number one recommendation when buying a home, whether it is a new build, a pre-construction purchase, or an older resale home, is to take your time and shop around.
The best way to do that is to use a trusted and experienced Calgary Real Estate company, one that represents the region’s finest properties and that has the best interest of its clients in mind all the time.
I can assist you with identifying an ideal New Build for you through a forest of tress
Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS® System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.'