Finally, some progress

Well, arranging the financing is still plodding along at a snails pace (I'll provide more details about that once everything is finalized), but we have made some progress with the builder.

We do not want to enter into a contract with the builder until we have the financing in place, however, summer is marching on and we were worried about getting the house started on time. In about another month or two it will start to get more expensive to build, primarily because after November 7, a 7% winter handling premium is applied to the cost of concrete and any masonry work has to be heated to ensure the mortar cures properly.

So, we met with the builder today and agreed to start some of the necessary soil engineering studies. These studies take about two weeks to complete and cost about $2500, but are required before a building permit application can be filed. If the financing falls through (which I don't think it will) then we're out $2500, but on the other hand, we could be two weeks ahead when the financing does come through.

Hurry up and wait

One thing about building a new house, no matter how hard you try to hurry some things along, they just will not go any faster.

Almost three weeks ago we got a draft contract from the builder along with some drawings and technical specifications. We submitted these to the bank for review so that they could finally do the building loan.

Since then, it has been a painfully slow and unnecessary wait for a bank that has a funny interpretation of customer service (not to name names, but it's a national chain that hails from the province with the name New Scotland)

When I submitted the documents, I asked if there were any other documents I needed to submit. "Oh no," said the Bank, "we have everything." One week later I asked for a status update. "we need a letter of employment" was the curt reply". Within one business day I sent off the letter of employment and asked if they had completed the appraisal of the land. After two days with no response, and almost two weeks after submitting the necessary paperwork, I was on the phone to the bank manager seeking some answers. The bank manager agreed they may have dropped the ball, but then said the delay in ordering the appraisal was because they were waiting for documents from me! huh? This week, I finally met the appraiser at the house. Hopfully, by this Friday (three weeks after I submitted the paperwork) we may actually have a loan.

Once we have a loan in place, we can sign the contract with the builder and away we go.

A word about Mortgage Brokers

When it comes to securing a mortgage I prefer to use a mortgage broker. I know a lot of people just walk into their local bank branch and ask for a mortgage, but to me, that makes no sense. I'd never buy a car by walking into my local dealership and buying whatever car they offered me, so why would I buy a mortgage that way? I'd much rather shop around for the best deal.

Not all mortgage brokers are created equal. We had one crappy broker in the past who, although he got us a good rate, forgot to send us some paperwork and we almost lost the mortgage. So, I think hearing a testimonial from someone who had a good broker is helpful.

Our current broker is Rob McLister from www.myvirtualmortgagebroker.com. I really can't say enough good things about him. We have used him for three mortgages now and he has always gotten us a great deal. He works harder than anyone I think I have ever met and his turn around time on requests is usually exceptionally fast. He is based in Vancouver, so I have never actually met him, but in today's Internet enabled world, that doesn't seem to matter. He used to have an office in Toronto, so he is familiar with any Ontario-specific rules or laws and he is great at recommending more sophisticated mortgage arrangements that can save you thousands in interest charges over the life of the mortgage. He has twice arranged mortgages for us to do a Smith Manoeuver. You will never get that service at your local bank. Rob and his wife Melanie also write a blog (www.canadianmortgagetrends.com) which is a great source of information on anything at all to do with mortgages.

I picked Rob because of his blog and because he is a regular contributor to several other financial blogs I follow. In particular, when we first started thinking about arranging a Smith Manoeuver mortgage, I needed to find someone who I felt had sufficient experience in the intricacies of this technique. Rob's frequent blog posts and comments on other blogs gave me that assurance.