Norts999 wrote:
My understanding is the builder will take back into inventory and keep the deposit.
Builders do not allow change of buyer prior to close, as a rule.
Banks will enlist a realtor and sell at market value, returning max amount to seller, thus good PR for the bank.
It's a sellers market, no need to cut a deal to anyone. Though a good realtor may find that rare crazy situation, like a grow op, but you can't finance those.
I've heard of few cases actually in Milton where buyers couldn't close. So they found third party investors who helped them close deal (pending second agreement, promising title would change hand after closing + $xx for compensation). Just google shadow lending and you will see one instance. More and more people are doing this today, buying homes they can't afford based on speculation/thinking market will continue to rise, and flipping for profit once complete.
Household debt levels are highest ever in Canada since past 25 years. These combined loans take buyers (borrowers) up to the kind of loan-to-value ratios that were common in the US prior to the 2008 subprime mortgage crisis (actually it's higher if you do your research).
The big question everyone is asking is when the market would crash. Look up how many new lenders have came into play since the past 12 month, the numbers and loans completed and approved are mind boggling. They have already created what they call a 'bundled' product (twins a conventional mortgage) with a second loan by private lenders, which enables home buyers to borrow up to 85 per cent of a property’s value.