YIKES...you need to remove your financing condition in two days!

I've recently noticed a trend (especially in Guelph, Ontario, but it may be applicable to your own real estate market) where home buyers are either remove the conditions of financing or need to turn around their financing in only a couple of days.  Although we are in a balanced market in the area, nice homes that are priced correctly sometimes have multiple offers and realtors are advising buyers to remove the financing condition to make their offer "stronger".

Even if the borrower has been pre-approved for the mortgage, getting mortgage financing can still be an issue for buyers as the qualifications for mortgage lending have become more stringent. Borrowers who where once able to qualify (event six months ago) may find themselves in a position where they cannot now get a mortgage.

Here are some recommendations if you want to remove the financing condition from an offer:

1. Speak to a mortgage profession who is confident in explaining the risks. If they cannot clearly explain the risks find someone who can, because they do not understand mortgage-lending as thoroughly as they should. Do you really want to work with a banker/broker who doesn't know what they are doing?

2. If you are selling and buying a home, know exactly how much equity you have available when you sell. I find most people assume that they have more equity than they really do because they haven't accounted for all the costs and debts that need to be paid out. Your mortgage professional should review in detail the numbers with you.

3. If you are putting less than 20% as a down payment, you will likely need to obtain default insurance on the mortgage (sometimes referred to as "CMHC"). What I've found is that in cases where the mortgage financing becomes an issue, the borrower cannot get approved through the requirements of the default insurance provider.  The requirements are clearly laid out so be sure your mortgage professional knows them.  You can also get them at CMHC's web site.

It's Friday....should you keep working?

Okay, it's Friday and I haven't posted anything on my blog in two weeks...why? Here are some of my excuses:

- it's the middle of February and I'm starting to really dislike the cold weather (what has that got to do with posting on my blog?)

- I've been swamped with my mortgage business...it sure is busy around here (but Louis is doing all the paperwork...I just need to keep focusing on new clients!)

Forget the excuses...here are a few comments that I'd like to share from some of my clients...these are real "Success Stories"!

From Trevor Grieb (Guelph, Ontario):

My wife and I were Canadian citizens but just immigrated back to Canada from overseas.  We wanted buy our first home but where unsure of the process or even if where eligible to buy a home. I came to see Sandra on the recommendation of my realtor. Sandra was kind and patient, but also flexible. She worked with me to help guide me on the proper documentation required so that we were able to buy our first home in Canada: a home that was suitable long-term for our family.  She was also able to negotiate a great mortgage rate.

From Laurie Lamontagne (Rockwood, Ontario):

 

I first contacted Sandra on the advice of my realtor. We were looking to move to a bigger home because our family was outgrowing our old house.  However, we had debt that was making it difficult to even consider moving up into a larger home.  Sandra helped us consolidate our debt and get us back on track, while lowering our monthly payment.  The interest rate was great and the advice was honest.  After a year, we found the ideal home for us and we called Sandra again to help us make the move to our new house.  We would recommend Sandra to anyone.

From Angela Lauryssen (Hillsborough, Ontario):

I have had good and not-so-good experiences owning rental properties.  Because Sandra owns rental properties, I can ask for her ideas regarding different situations I encounter with tenants.  Part of my long-range retirement plan is rental property ownership. I can trust Sandra to give good and honest advice.  I’ve also contacted Sandra on several occasions just to get her opinion on interest rates and if I should be locking in my variable rate mortgages. I would recommend Sandra to anyone who owns rental properties or is thinking about buying one.