1. Too quick of a closing date.
Most homebuyers would think that enticing a seller with a quick closing date may save you good money in the form of a lower price. Although that may be true it also could cost you significant dollars with higher financing costs. The reason for this is that if you have not checked with your mortgage provider and your lawyer to ensure that your quick closing date can be met within the timeframe you have agreed to you may be forced to accept a financing deal that costs you much higher dollars. For example I had clients referred to me who due the timeframe of a closing date with a week closing the bank was unable to process the mortgage. In this case the homebuyer had to accept a private mortgage which could work within the tight timeframe to get the deal completed on time. This cost the homebuyer significant money in the form of a higher rate and a lender fees that could have been avoided with a slightly longer closing.
2. Be fully approved and meet all mortgage conditions before you waive your financing condition. This is a mistake that you as a homebuyer could make without even knowing that you have done this. Your mortgage provider should ensure you have all your conditions in place before you give notice to waive your financing condition. This could be in the form of an appraisal or obtaining a paystub etc. Once you waive your condition of financing there is no turning back. If your mortgage provider does not approve one of your conditions after you have waived all your conditions you may have to accept a B lender which will increase your financing costs significantly. You have to ensure the mortgage provider you are dealing with is extremely organized and on top of your conditions of the mortgage.
3. Ensure you know the terms of your mortgage before you sign and commit to the mortgage entirely.
Most people sign mortgage documents without knowing exactly what their interest penalties could be if you sold the property and broke the mortgage within the term of the mortgage. If you have an unforeseen event in your life such as a job layoff, separation, or even worse a sudden death you may be forced to quickly sell your property. Asking your mortgage provider what your interest penalty on your mortgage if that were the case is very important information to know. The large banks have very punishing penalties for fixed rate mortgages if you break them in the middle of the term. Comparatively some smaller mortgage companies have much lower penalties if you broke a fixed rate. The difference is thousands of dollars and without knowing this ahead of time you are putting yourself at risk. Bottom line is to know your mortgage provider is a trusted source with the knowledge and insight to look after you over the whole life of your mortgage.
Jeff Attwooll
Mortgage Broker
Equity Care Mortgages
519-620-1175
jeffattwooll.ca