The main idea
In many pre-construction projects, the mortgage is not funded on the day you sign the developer’s contract. Deposits during construction are usually paid on the project’s own schedule. Financing, if any, is reviewed toward closing, when the unit can be appraised and the project meets the lender’s requirements. This is not a universal rule: each project and each program is different.
Two calendars: deposits and the loan
The developer sets its own payment schedule (for example at signing, at construction milestones and at closing). The lender, separately, reviews your file, the property type and the project. It is worth asking early whether that building or community can be financed with the kind of loan you are considering, and what documents will be required near closing.
What is often reviewed near closing
- Your current situation: income, debts, credit and reserves — not only what was discussed at the beginning. There may be an updated review.
- An appraisal or valuation of the unit, depending on the program.
- Whether the project is eligible for that loan (for example, in condominiums, building or association requirements).
- The final amount, building fees and the funds you need to bring to closing.
General information, not financial advice or a commitment to lend. Subject to credit approval. Programs and requirements change and depend on each case.