The real estate market is in a frenzy and and in many markets, serious buyers are finding that they need to submit firm offers if they are to have any chance of buying a property. Not only that, but most properties are being sold over asking price to the highest bidder. The days of submitting an offers that were “conditional on financing” appear largely to be gone, at least for now.
The implications from a financing standpoint are significant because we mortgage brokers can’t actually ever guarantee financing, especially if we are looking at an application for pre-approval before even a property has been decided on.
Sometimes the application is not always totally straightforward either ie; debt servicing ratios are a bit out of line or credit may not be perfect, for example, and we are called on to give an opinion as to the likelihood of obtaining financing.
The consequences of buying a property and not getting financing can be very serious as the buyer risks being sued if they aren’t able close on the purchase. The problem is compounded when buyers enter a bidding war and later find out they may have overpaid. If the appraisal comes in below the purchase price, the purchaser needs to come up with 100% of the shortfall, in addition to the normal down payment.
Suffice it to say, if you are buying in today’s market, you need the advice of a good mortgage broker who can help you to assess your situation, the likelihood of obtaining financing and also the experience to help you navigate the landscape, in the event unwanted surprises do arise.
At RockYourMortgage, we have been arranging mortgages for 18 years and work with banks, trust companies, credit unions and private lenders, to help you find the best mortgage. For more information, call David Grossman today at 416 876 2031, click here to schedule a time to talk.
