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Mortgage Question

Chiggs@mac.com

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I have a question for any mortgage brokers out there... Mods - this seemed like the best place for the question - please move if not appropriate...

I am pre-approved for a condo purchase that was initially supposed to close in 2009 (yeah - right !!) but now looks to close in late 2010 or 2011. I have already paid a 10% cash down payment for this property and it has increased in value since I purchased it...

I previously sold my other condo and am renting as I wanted the flexibility to not have to time the sale of my condo to the closing of my new condo.

With the delay in my condo's completion, I'm starting to feel as though I don't want to wait that long and may instead want to purchase a small house close to High-Park or Y&E to remain fairly close to downtown yet have a small yeard, etc. Most of my liquid savings went into the 10% down payment on the condo although I could certainly put together a 5% downpayment for a second property... If I were to do this, my intention would be to keep the condo and rent it out or sell it once it's complete.

In the interim, how would the banks view my mortgage application? Would they be assessing my ability to carry both mortgages and if so, would they factor in potential rental income from the condo once it's complete? Or am I basically forced to wait 2 years or so until I can sell my condo?

Any thoughts / advice would be much appreciated...
 
The bank will consider the condo as an investment so they will factor the potential rental income, however to qualify as an investment you need to put 20% down so you will need to come up with another 10% on closing. Unless you find a very good deal now, I would not buy anything now. If you are going to put just 5% down you will have to pay a high premium insurance and your carry costs are going to be a lot higher than the rental option.There are a lot of good rental options in downtown, you find amazing deals. keep renting and try to save money to put more downpayment on your condo.
 

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