So you’ve put an offer on the home of your dreams, and then you get a call from your realtor, “OFFER ACCEPTED.” Well, doesn’t that call for celebration? Yes and no, because although you have won the home, you still need to arrange mortgage financing. So immediately, you reach out to your broker or bank to start the application process.
You have worked hard to collect all the required documentation for your application. Your broker has created a package to submit to the lenders; after a day or two, the lender responds with approval and has issued a mortgage commitment letter. YAY! What is a mortgage commitment? Good question; a mortgage commitment is a conditional approval the lender gives based on the information provided in the application. Commonly the lender doesn’t review any of the clients’ documentation before the approval; that is why brokers will typically request all of the documents upfront to check that the information we are providing the lenders is solid.
So now you have signed the lender’s commitment. That can feel like a relief, but you are not free and clear yet. The lender has the right, at any time, to void the commitment, and the worst part is that they don’t even need to explain anything to you. The same goes for the client. Even if the commitment has been signed, they are not obligated to stay with that lender. It is once everything has been signed at the lawyer’s office that everything is set in stone. That’s when it’s time to celebrate.
Don’t panic! It might sound terrifying, especially in the last stretch before the closing, but the lender typically only pulls out of the deal for a good reason. Typical reasons a lender would void a contract are: if you have provided fake documents, if the information you have provided has changed, if you have acquired more debt, if you omitted information, etc. If you prepare appropriately, are honest, and don’t make any significant changes during the mortgage process, you should not run into any problems.
At Dominion Lending Centres NasaKasa, we take pride in ensuring that our deals close without a hitch and on time. We have seen too many clients come to us with a last-minute rush to complete their deal on time because something has fallen apart elsewhere. With our sharp-thinking team and our great lender relationships, we tackle challenging deals with delight. If you are looking for someone to handle arranging your mortgage financing, don’t look any further; reach us at 905-997-7001.