The FOMO (Fear Of Missing Out) in the Ontario real estate market is powerful. But jumping into a six-figure pre-construction contract before your financial groundwork is laid is dangerous. Before you look at a single floorplan, verify these five pillars.
1. The Savings Pillar
Do you have your deposit schedule mapped out? A pre-con condo will demand 20% of the price over roughly two years. You must have the first 5% liquid and sitting in a chequing account or FHSA today, and a mathematical certainty that you can save the remaining 15% from your income over the next 24 months.
2. The Income Pillar
Lenders demand stability. Are you past the probation period at your salaried job? If you are self-employed, do you have two full years of Notice of Assessments (NOAs)? A bank will not fund a mortgage if your income trajectory is volatile.
3. The Credit Pillar
Pull your Equifax AND TransUnion reports. You should be aiming for a score above 680 to qualify for the best A-lender rates and CMHC structural insurance. If your score is low, aggressively pay down any revolving credit card debt before applying for a pre-approval.
4. The Team Pillar
Pre-construction requires a specialized team. Have you interviewed and selected a mortgage broker who understands the new 30-year amortization rules? Have you found a real estate lawyer who negotiates levy caps?
5. The Reality Pillar
Have you run the true numbers? Not just the purchase price, but the closing costs, the land transfer tax, the legal fees, and the potential impact of interim occupancy? Use our suite of Ontario-specific calculators to remove the guesswork entirely.