Buy in Today’s Market – Mortgage Issues

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The most recent statistics from the OKanagan Mainline Real Estate Board (OManagan) confirm that we are still in the buyer’s market in the central Okanagan. There is certainly the impression that there has been some pent-up demand given the COVID-19 situation. It has been busy the last couple of weeks as more and more buyers seem to be looking for homes. This will probably create more competition for available properties.

If you are in the market for a home right now or are considering a purchase this spring, here is my advice to increase the chances of you being the successful bidder in a possible multiple bid situation. By taking these steps, you could avoid some of the madness that could occur in this late spring market.

This is my best advice and the easiest advice. Get pre-approved for your mortgage financing. Not prequalified, but a full pre-approval.

Before you look for a home or place an offer, work with your mortgage broker to complete a full mortgage pre-approval. This will include collecting all supporting documents that a lender will need to provide final approval for your financing. We’ll let you know about your purchase budget, look at any potential challenges, and make sure you’re ready to go – other than looking for the right property.

We can also look at the types of properties you are interested in and whether there could be potential financing challenges due to property issues.

If you do all the work in advance, it could prevent your offer from collapsing because you were not able to get financing for your purchase or perhaps lose ownership by needing to apply for an extension to finalize your financing, which the seller may not be willing to offer because there are backup offers on the property.

Lenders have made some adjustments to their policies and guidelines and even pulled some programs because of COVID-19 so it is more important than ever to make sure you are pre-approved. This is an ever-changing mortgage market, and lenders and mortgage insurers have updated policies that occur almost every day as they adapt to our new environment.

But a word of caution – don’t be tempted to place an “erjet libr” offer. “SATISFE FINANCEMENT” is a key clause that must be included in each offer. You could be the most qualified buyer in history. Stellar credit, high income and job stability with a large down payment, but in the end, a lender could still refuse your financing application.

Here’s why: Mortgage financing approval includes not only the lender being happy with your qualifications but they also have to approve the property. Essentially, it is a two-step process.

My best advice for you would be to never place an “ujet libr” offer regardless of what others recommend and think long and hard about it, unless you have the money at the bank to cover your purchase in case you can’t get satisfactory financing.

Or have a detailed conversation with your mortgage broker well in advance to place a “er subject” offer. There are some strategies to minimize your risk, but an individual conversation would be necessary.

In our current market, you must be ready to succeed, so please give me a call to review your options and get pre-approved.

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