Ordered Pre-Construction but Now No Mortgage

Things were going along nicely, and you ordered a new home before construction even began.  Now, with skyrocketing mortgage interest rates, it appears that you won’t qualify for the financing.  What can be done?

First, many things can be negotiated with the builder.  If you don’t ask, you won’t know.  Contractors are living in the real world with you and can understand the difficulties with mortgages.  Contractors also routinely work with real estate agents, whose job it is to negotiate. 

Finding a Balance Between Needs, Value, and Budget

Next, look at the items you have selected for customization.  There are many items that we would like but not necessarily need.  Consider which are primary to the needs of you and your family and those items which will boost the value of your home when you decide to sell.  Also, think about those areas that can be adjusted later on. By reducing the customization and add-ons, you can reduce the overall price of the home and will need less financing. This could be the ticket to your still getting a new build but at an affordable price.

In the same vein, look at what is included in the cost and what you may be able to achieve less expensively.  For instance, landscaping.  This is not always included by the builder.  You may be able to work with a nursery to get a better deal on sod or consider seed instead.  If there is a homeowners’ association, read the rules carefully so that you understand what you can and cannot place in your yard.  It’s somewhat the same with the interior.  You will need to come up with window dressings, but they don’t need to be custom-designed. Installing your own rods and inexpensive curtains and drapes can hold you over until your budget allows it.  Just because you would like all new furniture, see if you can make do for now or invest in less expensive re-upholstery instead. 

Smart Mortgage Shopping:

Most importantly, don’t take the first mortgage option, or the easiest route, that you are offered.  There is no rule that says you need to use the lender that the builder offers.  Shopping for the best deal is important.  Having options and comparisons is the key to finding the best deal for your circumstances. Competition can also spur incentives. Just be careful to compare actual costs, especially in terms of interest rates that will last over several years, versus a single offer by the builder to include some amenity that he or she knows you really want.

One of the best options is to discuss your situation with a reputable company like Easyhouseloan.ca.  They are experts when it comes to all types of home purchases.  They routinely work with individuals and families who are in the same quandary in which you find yourself.  The best part is that easyhouseloan.ca has access to a wide range of lenders who are willing to work with home buyers.  This includes interest rates or clearing up some issues with credit.  Contacting them at any point in your contracting and purchasing timeline can benefit you and your family.