Generally speaking real estate buyers will include a condition “subject to financing” when buying a home. Once the significant lender conditions have been met (such as confirmation of your ongoing employment, income and your down payment) I will provide you with the lenders mortgage commitment and a letter confirmation of the approved mortgage financing. You can go ahead and remove the subjects on your offer to purchase, if you wish. Once you do this you are buying that home. Therefore, your financial situation should not change significantly before the completion/closing day when the mortgage funds. Or the money might not be there!
It is very important to remember that the lender reserves the right to review all applicant’s financial status right before closing on your mortgage. (They can verify your debt status by pulling a new credit bureau report) If there is a substantial change in your financial status, the lender could refuse to fund the mortgage. This would normally only happen if you could no longer “qualify” for the mortgage based on the debt servicing ratios they rely on.
I recommend you AVOID the following once you have bought a home and are waiting for the mortgage to fund:
- Do not quit your current job
- Do not reduce your income (go from full time to part time, take a lower paying job with the same company)
- Do not go out and buy all the new furniture and appliances for your new home and put it on a “do not pay for a year account”
- Do not enter into a new lease for that car you “have to have”
- Do not rack up credit card debt
- Do not co-sign a loan or mortgage for anyone else
- Do not stop paying your current debts or pay late (including the current mortgage on your existing home)
- Do not spend the money you saved for your down payment and closing costs
I specialize in working with First Time Home Buyers and New to Canada purchasers because I love to educate and support them through the home buying and financing process.
If you or someone you care about is in the market to buy a home, please contact me @ 604-726-9550. I will guide you so that you can easily determine which mortgage financing option will work best for your investment decision.