Cutting my occupancy fees

[nodoubtguy]

I'm looking to reduce my occupancy fee and was told that if I pay down the balance owing at the time of interim occupancy, that I will essentially only be paying the common area and taxes, and not any interest on the unpaid portion.

Can anyone give me more detail or confirmation of that? also, if possible must the payment be for the full balance owing or can it be a partial payment?

 

[gristle]

Yes to the first portion.

If you have the cash, pay as much as you like or can.

But make sure you contact your lawyer and the developer now in order to clarify whether you can still do it without any type of penalty. And make sure that you are aware of all closing costs. You don't want to be short of cash.

 

[interested]

I am not sure you can pay it down. Builder would have to accept this. Usually it is in a clause which you add at the time you sign or within your 10 day recission period. That said, often the builder will let you do this anyhow so griste's advice about contacting your lawyer and the developer makes absolute sense.

 

[CN Tower]

I'm looking to reduce my occupancy fee and was told that if I pay down the balance owing at the time of interim occupancy, that I will essentially only be paying the common area and taxes, and not any interest on the unpaid portion.

Can anyone give me more detail or confirmation of that? also, if possible must the payment be for the full balance owing or can it be a partial payment?

How much of your fee is interest and what rate are you they charging you? Isn't it regulated by statute?

 

[interested]

It is regulated by statute I believe as you suggest but one can eliminate the "pseudo mortgage charge and interest" on the outstanding amount by paying on occupancy. However, you are still responsible to pay your share of taxes and common expenses.

For alot of people who have the money to pay with cash, they do not wish to pay the mortgage /interest charges the builder is seeking especially if it is a principal residence since the interest charges are not tax deductable and if they have money in the bank or elsewhere at the same time, the investment return is taxable. So unless one can make double (assuming a 50% tax rate) the investment return that the interest charges are, one is better off to pay the property off asap.

At least that is my understanding.

 

[nodoubtguy]

Thanks for the input....seems like I might be able to get some money down at occupancy.

Does anyone know if it has to be the full amount owning?

 

[UrbanVigor]

How much of your fee is interest and what rate are you they charging you? Isn't it regulated by statute?

Not sure what it is now, but as at December 2009 when I first/last looked into this the rate was 3.8%. Not sure if it rises and falls from month to month, but it is a statutory rate determined by the province, I believe.

The Occupancy Cost = Unpaid Balance @ Interest Rate (divided by 12?) + Condo Fees + Property Tax

Correct me if I'm wrong, but is the Property Tax calculated at the factor advertised on the sales sheets then you receive a credit or pay more based on the actual property tax assessment?

 

[Kevin86]

Does it matter if the person is going with a variable interest rate mortgage which currently is around 2.2%? Or it has to be paid at 3.8%?

Why do they have to charge property tax starting at occupancy when the property's title is not transferred yet?

Thanks all.

 

[UrbanVigor]

Your mortgage has nothing to do with the occupancy fees.

I have no real answer about the charging of property tax except that since it's built into rents then just the same it would be built into occupancy fees. If the developer had to pay property tax then it would surely be built into prices. At least it's more transparent this way.