How to Prepare for Interim OccupancyOctober 5, 2021
Occupancy is scheduled for early Fall 2021 at Westwood Gardens, our extraordinary residential community in the heart of Richmond Hill. As move-in day approaches and the excitement builds, there are a few important items that new residents should keep in mind. Whether this is your first new home or an investment you added to your portfolio, here are some important things you need to do before you take possession.
What’s an interim occupancy fee you ask? It’s a monthly fee, paid to the vendor, for the time between move in day (also known as “occupancy”) and when your condo finally closes and ownership transfers to you. Interim occupancy exists because ownership of the units in a building can’t transfer from the builder to the buyers until the building is registered with the Town of Richmond Hill and that doesn’t happen until all the units are complete, but occupancy often happens sooner than that, especially if your unit is on a lower floor.
The interim occupancy fee is made up of three parts: interest on the unpaid balance of the purchase price of your condo, an estimate of the municipal taxes for your unit, and a projected common expense contribution to keep the building running. It’s a good idea to have some money set aside for these fees as you will be required to provide your solicitor with post-dated cheques for the interim period.
By now you've gone through pre-qualification and pre-approval steps in your mortgage journey and the time has come to commit. A mortgage commitment letter will outline the terms of your mortgage, things like the interest rate, loan term, and other aspects related to the deal.
Give some thought to what type of mortgage would be best suited to you. Fixed or variable? What length of amortization will you want and what term length? The maximum amortization length in Canada is 25 years and, as for term length, preferences vary by age group, but the majority of Canadian home buyers opt for a 5-year term. As for fixed vs. variable, with the recent increase in fixed rates (from 1.7% to 2.3% in March of this year), many purchasers are now going with a variable rate (1.4% at time of posting), but it's a personal choice, so take some time and decide what's best for you.
Since 2018, all Canadian home buyers have been required to undergo a mortgage stress test, essentially demonstrating that you would still be able to make your monthly mortgage payments if interest rates were to rise. In June 2021, the minimum qualifying rate increased from 4.79% to 5.25%. Before move-in day it's a good idea to stress-test your mortgage at this new rate and make sure you're covered. There are a ton of online tools to help you do this - Google "mortgage stress test calculator Canada 2021" to find one you like.
Whether you're moving an entire home or just a few boxes, a well thought out plan will set you up for success. Start with getting a few quotes for a moving service and booking them for the big day. Schedule a time for the elevator with the property manager to avoid bottlenecks and ensure safe physical distancing in compliance with COVID rules. Get plenty of boxes and pack a little every day, that way you won't find yourself overwhelmed the night before your move.
Make sure you're comfortable from day one by taking the time to set up all of your essentials - heat, hot water, electricity, internet, and cable - before move-in day.
Don't forget to make it official and update your address. Canada Post has an easy mail forwarding service that you can find here, but long-term you'll also need to inform your bank, credit cards, employer, as well as any newspaper or magazine subscriptions.