Find a lawyer to help you answer your legal questions.

  • My Legal Briefcase

    When Should a Financing Condition be Included?
    Posted:
    Notice: Undefined property: stdClass::$post_date in /var/www/webapp/ui/mlb_faq.php on line 96


    When purchasers prepare to buy a home one of the first things many of them do is to go to their bank and see how much they can afford. This is a very wise starting point. What is commonly misunderstood is the fact that the lender must be satisfied with both the credit worthiness of the purchasers and the mortgagability of the property. Pre-approval based on financial information only clears the first hurdle.

    A condition for financing is required unless the approval was obtained based upon the specific property for which an offer is being submitted. There are many reasons why a particular property may not qualify for a mortgage even though your preapproval is within the purchase price. For example if the property does not have a potable water source, has any suspected contamination issues, has access issues or is over-valued.

    Real estate agents should include a condition on financing, if financing is required, unless the approval granted is specific to the property in the offer. Pre-approval will speed up the process and provide comfort that the purchasers are looking in the right price range but should not be viewed as providing a level of comfort such that a condition is not required.

    Disclaimer: Content on this website is provided for informational purposes only and does not constitute a legal advice.





Document Banner