I have a question on Completion mortage. If I choose a builder to build the house and choose Completion mortgage option. I will pay 5% at beginning when starting the construction and will only require a mortgage upon closing. My question is whether CMHC will consider that I only pay 5% downpayment and charge the corresponding insurance fee, or CMHC will consider the ammount of downpayment when I require the mortgage upon closing? Thanks., ~5 v, O8 d4 F/ ?& _8 f. n
: p$ e8 P, o$ x- F& A( KAnother question: if I purchase the lot and apply for a mortagage for this lot purchase, does CMHC charge the insurance fee? Thanks.
Question 1: ( ~* P L# [ l& d. O6 |7 J. rThe mortgage company will calculate your downpayment percentage when they need to release the mortgage for your closing. If there is a CMHC insurance fee, the fee will be added to your final mortgage amount. ) i+ P. C5 r& K8 ?; s
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Question 2: if I purchase the lot and apply for a mortagage for this lot purchase, does CMHC charge the insurance fee? Thanks. % `- F9 Z6 ^/ m- \7 e O+ a/ yNormally, the lending company will not lend money for you to buy a lot (land).
! _/ M0 }/ E% _6 @" ^; UI have another question. If I choose Completion mortgage option, how much downpayment I need to pay at beginning when starting construction? I saw someone mentioned she only paid 5%. However, some builders told me that they need 20%. I want to check if that is negotiable? Thanks.
Yes, that is a negotiable item. Do you have a realtor? Ask your realtor to talk with the builder. Normally, 5% is good enough. But some builders need 10%. For those builder asking you 20%, their financial situation might not be that good.