WHAT YOU SHOULD KNOW ON MORTGAGES TO MAKE A WISE DECISION

From the desk of Real Estate Lawyer

I have been thinking for quite some time to communicate some thoughts which could be useful in making right decisions in your real estate transactions whether you are the first time real estate buyer or refinancing an existing mortgage, one of the issues that always bother most Canadians is the mortgage financing. In order to have peaceful transaction completed you should consider following steps besides others:

1. Mortgage should be arranged well in advance, preferably before you sign the agreement of purchase and sale. You should know where you stand.

2. Always obtain a mortgage pre-approval confirmation in writing.

3. All the terms and conditions should be discussed in details especially with regard to the rate of interest, terms of mortgage, whether open or closed, variable or fixed, pre-payment and penalty clauses, CMHC fee, and what amount would be available to the lawyer for disbursement.

4. Make sure to confirm exact dollar amount to be adjusted towards any HST, property tax hold back, interest adjustment , first instalment, etc. This would give you a fair idea of the amount of finance being sent to the Lawyer and how much, if any, you would be arranging from personal sources. I have seen in my practice, the clients who do not have clarity on this area are confused and they struggle at the time of closing. For existing homeowners, before your mortgage is due for renewal you should check up with the existing financial institution and compare with the other institutions including the total borrowing cost.

5. Whether you are dealing directly with the financial institutions or through mortgage agent, make sure that you understand all the conditions and the institutions requirements should be completed before the scheduled closing date; proof of income, proof of funds, proof of employment, proof of cash down payment, payment of other debts obligations, appraisal, etc.

6. Most important, but not the last always stay in touch with the financial institution or mortgage agent

With whom you are dealing to make sure that the mortgage instructions are sent to the Lawyer well in advance of the closing date. I have seen some clients are struggling up to the last day of closing which result in delay in closing and consequently delayed cost.

Do not hesitate calling me or having an appointment before you finalize your deal or financing. Please note that the information in this newsletter is not legal advice rather are some ideas sharing with the readers. However you are welcome to discuss your situation with me after having an appointment.