One of the benefits of working with an independent mortgage professional is having lots of great financing options! Rather than dealing with a single lender who has one set of products, brokers work with multiple lenders who offer a wide selection of mortgage financing options. This comes in handy when your situation isn’t “normal” or you don’t quite fit the profile of a standard buyer. Purchasing a new construction home through an assignment contract would be a great example of this.
Purchasing a new construction home through an assignment contract can be tricky as not every lender wants the added perceived risk of dealing with this type of transaction. Most of these lenders won’t come out and say it, rather they will simply add a significant list of qualifying conditions to make the process harder. The good news is, there are lenders available exclusively through the broker channel that have favourable policies for assignment purchases.
Here are some of the highlights:
- In order to qualify, all standard purchase qualifications apply (income, credit, and downpayment)
- Assignments can be at original purchase price, or current market value
- Minimum 620 beacon score with no previous bankruptcies or consumer proposals
- The full downpayment must come from the purchaser and not include any seller incentives
As far as documentation goes, the lender is going to want to see the original purchase agreement signed by all parties, the MLS listing, the assignment agreement signed by the builder, original purchaser, and the new buyer. The lender will also want to see the side agreement between the original purchaser and the new buyer that includes the amended purchase price, and the lender will want to substantiate the value through a full appraisal.
Now, as every situation is different, this list of conditions is in no way exhaustive, but simply meant to show that assigning a new construction purchase contract is in fact doable while highlighting some of the terms necessary to secure financing.
If you are looking to purchase new construction through an assignment contract, or if you want to discuss purchasing a home through traditional means, please contact me anytime! I have access to the very best products on the market that won’t limit your financing options!