Ever get confused with what the difference between Interim Occupancy date and Registration date are? Let’s see if we can help clarify that for you…..
Apples and oranges aren’t the same thing….neither is Interim Occupancy Date and Registration Date. When purchasing a new build condo there are some key elements to keep in mind.
The period between occupancy (i.e. when you move into a new house) and the final closing (i.e. when you will take title of the property and thus require a mortgage), is called the “interim occupancy period.” During this time, buyers don’t live in the home for free but instead pay the builder a monthly interim occupancy fee, which you can think of as “paying rent” to the builder. Your occupancy date is then your “move in date”, the title transfer day is then your “ownership date” (when you start paying your mortgage) and most often, with new build purchases, these days do NOT coincide.
Why does this happen? Buyers cannot close on their new build home, and start paying their mortgage, until at least 50% or more of the units are occupied.
If you are one of the first to occupy your unit, you might have a longer interim occupancy period where you are paying rent instead of your mortgage. If you are one of the last phases to occupy, it could be then a much shorter time between occupying and the final closing. (For more information speak with your builder to confirm which phase or stage of the occupancy you are in to have a better understanding of your actual closing date you will then require the mortgage on).
Interim Closing (the occupancy before closing) ONLY occurs in condominiums, free-hold purchases do not have this possibility, as they do not have any condo corporation requiring registration.
Why is this important to know? Lenders can hold mortgage rates for a maximum of 90-120 days. Given you will not require the mortgage until the title-transfer date, its important to communicate with your builder and mortgage broker on this expected date to ensure rate holds are in place for this. A great short read on how to further understand how you are qualified for a mortgage:Understanding how mortgages are qualified
Your builder will provide you written notice 30 days prior to the registration date (by mail or communicated directly to your lawyer). Check your mail regularly and notify your broker as soon as you have this date to allow sufficient time to finalize your mortgage details.
There is no way to say with certainty how long the occupancy period will be, but it normally lasts several months. During this period you must pay the builder an Occupancy Fee.
To give you a better understanding of how much your monthly mortgage payments could look like, have a look at our : Mortgage Calculator for more details.
Final Closing! The occupancy period ends when the condominium is registered with the Land Registry Office and you receive the title to your property. This is also when you start paying your mortgage, WOOHOO. Once the condominium is registered you must pay the balance of the purchase price together with any adjustments. You will then receive the ownership of the condominium and will be able to register your mortgage against the condominium and receive the money you have borrowed.Here are some closing costs to keep in mind when coming close to moving day :Closing Costs
We hope this helps you understand the little things that go into purchasing a new build condo, for further questions please feel free to call us at 289.337.4029.
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