Appraisal Risk

Firm Offer ‐ Risk Assessment I have underwritten your mortgage application, and you meet both the debt service and credit guidelines.  If you decide to remove your condition of financing from your offer to purchase, you will have the following risks to consider:   

 If the property's appraised value comes in lower than the purchase price, you must increase your down payment to cover the difference.  The fewer funds you have available as a buffer, the greater the risk that you won't be able to make up the difference.   

 Appraisers rely heavily on recent comparable sales in the immediate area when estimating a property's value. The fewer comparable properties there are, the more subjective the appraiser's job becomes, especially if your subject property is remote, or unique.   

 If you are making a substantial down payment on your property, then the appraisal condition presents only the limited risk that you may be required to pay for high‐ratio loan insurance if the value is adjusted downwards.   

 If you are only making a small down payment with limited additional resources, the risk in waiving your financing condition before the lender has signed off on the appraisal increases as room for adjustment is smaller.   

 There is also the risk that an appraiser flags a specific issue with the property, such as the presence of knob & tube wiring, lnsulbrick, disturbed asbestos, UFFI or other materials the lender deems unacceptable.  In such cases, the lender may still be willing to proceed on the condition that a portion of the mortgage funds be held back until the borrower provides confirmation that issues have been addressed. Once the necessary repairs are made, the lender then releases the held back funds.   While waiving your financing condition before having a fully qualified commitment from your lender is a fairly common practice at the time being for the GTA, you are taking a significant risk when you do this.   The bottom line is; the less financial flexibility you have, the more important the financing condition becomes. 

Lindsay Doke  416 464 6423 

MountainView Mortgage Brokers

Foreign Buyers Banned Toronto Real Estate

 So... Foreign Buyers BANNED

for two years except...

If your kids buys the house for cash...

Nothing changed

https://www.immigration.ca/permanent-residents-international-students-exempt-from-canadas-2-year-foreign-buyer-ban

https://BuyinginToronto.ca

Call David Pylyp 647 218 2414 or book an appointment

Calendly.com/DavidPylyp

Is your Mortgage Renewing Soon?... What else is out there?

These are interesting times we are living in, with a record inflation that has not been this high since August 1991.  Many clients out of fear of the unknown are simply signing their mortgage renewal agreements without looking at what else is out there.  

The Trudeau government provided many people during Covid 19, particularly those who were self employed, with monetary relief so they could stay afloat. It also resulted in them taking on more debt as they were forced to close shop, but still had to maintain payments on their leases, mortgages and other financial obligations tied to their businesses.

 

There is a huge growth in alternative lending in this sector. Having one payment to consolidate all your debts is the credo under how this lending operates. One can argue you are further ahead with a higher mortgage rate with one payment vs  your low rate mortgage at the bank that keeps you with balances on your unsecured debt. This is because your reported net income on your tax return does not debt service at the mortgage stress test. This rate is currently 5.25% as of April 14/2022.  So what good is low rate on your mortgage when you still have unsecured debt at 2 to 3 times higher. 

 

There is a better way. Want to know more...

 

Please connect with me 

https://RenewYourMortgage.ca 

via email at lindsay@mountainviewmortgage.ca or 

by phone/text @ 416 464 6423

Lindsay Doke Mountainview Mortgage,

Mortgage Agent lic M18001723 

*Photo Mirabella  1926 Lake Shore Blvd W. Toronto