Realistically, everyone wants to close with the original buyer except in exceptional circumstances. Upgrades are so obscenely priced that it is an easy way for the builder to ease pain. 100K in upgrades may cost them 10K but they get to keep the signed contract and closing date. When construction loans are running at close to 20%, they want incoming money asap.
And that might be a possible outcome for the people in the article. Hail Mary and maybe the developer drops the contract price enough to let them close to just get it off the books and to move on. Unless the developer is cash strapped I doubt it but as I said, they may look stupid, unless it works...
Depending on how many houses are going to fail to close, there may be a path. I haven't heard of it happening before but if a ton were failing to close, builder (or an associated entity) could offer a private second mortgage to cover the gap so the buyer can close. Set something like no payments for five years and then a painful balloon (something like 10% yearly so in five years you would owe 1.61 times original loan). Buyer can refinance or sell at that point to satisfy the balloon. Hopefully they are no longer underwater by then. That gets builder substantial cash now and another slug in five (or less) years.
The buyer has to ask more questions and get answers in writing. If a room is 2 inches smaller than on the plans you don't get to renege on the deal. What are the +/- percentages. How important is that too you.
I expect 0.5, maybe 0.25, almost zero chance of 0.75. My payment came out a few days ago so this won't affect me until the new year.
www.bankofcanada.ca
Explain to me like I’m 5…
The people looking to lend money don't see as high of a return currently, so there's less resources (bonds) in the pool. Interest rates will go up to entice people to come back to lending.
So you're expecting BoC to crank up the rates again? Or the banks to keep their rates high?
Bonds control fixed rates. Bond rates and BOC rate decisions are not always correlated. That is partly why delta between variable and fixed moves around.
Dev charges are a killer. I looked at rezoning my urban property. Fees and charges not including building permits to the city of Markham and York Region:
Variable rate mortgages rise and fall predictably with BOC rates.
Money seeks the higher ground. Why loan out your money at 2% when the stock market pays more in dividends
apple.news
I don't think I've ever had a mortgage under 5%, some as high as 13%. They are survivable if you don't walk in with your eyes closed. By shear luck we dodged the 22% of the early 1980's.Big number of renewals coming up in 2025…and many will be in the predicament in the article.
63 year old…with a 1M mortgage…planning selling and moving to Mexico….
Canada could see a wave of mortgage renewals in 2025. Here is how some homeowners plan to navigate the payment shock. — CTV News
At least 1.2 million Canadians are facing a mortgage renewal in 2025, and 85 per cent of those existing home loans were contracted when the Bank of Canada’s interest rate was at or below one per cent. Here's how some homeowners are planning to navigate the increased payments.
About a 30% increase expected for most mortgage holders renewing in 2025 to their mortgage payments.
That’s not gonna be pretty.
California is allowed to use any available water source to fight fires. That could include your pool. I'm not sure if you are allowed to put something over or near your pool to discourage them from taking a few thousand liters a scoop as you want it for your roof sprinkler. A roof sprinkler is 20-50 gpm. My pool is relatively small and it's 13000 gallons (but if you pump it empty, it may pop up like a boat). Even at 100 gpm and leaving some water in the pool, that is days of sprinkler use. You normally need far less than that.
