Im told you wont draw from as biddable an interest rate when mortgaging to build a house as anti buying...?
since the bank has nought to repossess if you bankrupt or skip town. But if you did build and took out a one year term, would the bank not offer you a fair interest rate when you remortgaged at the wrap up of the year, since they now have something to possess?
Answers:
In Canada, when building nearby are 2 types of builders mortgages. If you are building with a large builder and he is tied to a mound you can get an assumption mortgage. Basically this is a mortgage that you assume at the end of the building cycle. Similar to a regular mortgage except that you are waiting until the house is built and you "assume" it on the date of completion of building and i.e. when you start your mortgage on it.
The other type of mortage (more common) is the builders mortgage where you pay on the draws that the builder take as the house construction is progressing. It is done in stages so as the builder takes more money, you originate to pay more and more on it. With this type of mortgage, the banks usually will want a longer possession than 1 year. A bank wants to gross money on the mortgage and will usually want a 5 year term.
All in adjectives the interest rate should not vary that much from a regular mortgage. Again credit is always a substantial factor as well as downpayment.
Good luck,
Victor Source(s): www.CanadaMortgageTeam.com
www.CMTL.ca
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Answers:
In Canada, when building nearby are 2 types of builders mortgages. If you are building with a large builder and he is tied to a mound you can get an assumption mortgage. Basically this is a mortgage that you assume at the end of the building cycle. Similar to a regular mortgage except that you are waiting until the house is built and you "assume" it on the date of completion of building and i.e. when you start your mortgage on it.
The other type of mortage (more common) is the builders mortgage where you pay on the draws that the builder take as the house construction is progressing. It is done in stages so as the builder takes more money, you originate to pay more and more on it. With this type of mortgage, the banks usually will want a longer possession than 1 year. A bank wants to gross money on the mortgage and will usually want a 5 year term.
All in adjectives the interest rate should not vary that much from a regular mortgage. Again credit is always a substantial factor as well as downpayment.
Good luck,
Victor Source(s): www.CanadaMortgageTeam.com
www.CMTL.ca
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