Shopping for a new home can be fun and exciting, but there are many details that contribute to a property’s marketability.
Mortgages that have the lowest total cost are reserved for the most marketable properties that are in prime locations as per the lender’s criteria.
Please remember that a mortgage professional can never advise a buyer to make any subject-free offers or even to remove the subjects on an offer. The decision to remove subjects is one that the buyer has to make once all of the conditions for their mortgage approval have been satisfied with the lender(s). Also remember that there cannot be any major changes to the borrower’s application details prior to the completion of their purchase as it may affect the borrower’s qualifications and change the conditions of the approval.
A Dominion Lending Centres mortgage professional will provide a buyer with the lowest cost and best mortgage for their scenario and for the property that they select to purchase. This comes without limitations as we are without bias to any particular lenders and we protect a buyer’s credit score, which is another contributing factor to the best mortgage.
Here are some of the property details that can affect a lender’s decision on whether or not they approve a mortgage:
Property Zoning- if the zoning is anything other than plain residential then your options will be limited. This sounds simple. However, some condos are zoned commercial if there is a large commercial component to the complex. Industrial, Agricultural Land Reserve (ALR), or leasehold (government or otherwise) will limit a buyer’s options.
Here is a list of some other potential deal breakers:
- cable cord construction
- oil tank(s) on the property
- self-managed stratas (no strata management company)
- size of the property- below 500 sq. feet, doesn’t use municipal sewage or waste
- former marijuana grow op or used for illegal activity
- outdated electrical
- over 1 Acre and/or multiple buildings
- age restriction(s)
- rental usage
- any animal use
- any structural issues/damages work done without permits
- ongoing or upcoming assessments or legal proceedings
- prior fixes in the building not done to the lender’s preference
- strata contingency fund with less than $1,500 per unit in the entire strata
The lender always reviews the details of each property only when an accepted offer is in place. The request for information can be a simple document or it can require an explanation/written documentation from various parties. This information may go back several years in order to get to the source of the issue. This, of course, takes more time.
With complexities such as these, it’s important that a real estate agent discloses the information to their buyer right away so that it can be brought to the lender’s attention. The agent should also be proactive in getting any and all documentation pertaining to the building/property so that the buyer can evaluate if a property has long term value to them. Many of the issues stated above can affect the long term value and marketability of a property.
As a mortgage professional, we share any and all information that the lender provides to us if they decide not to approve a property that is being purchased. We care about protecting borrowers from a bad real estate investment and are without bias in the advice that we provide.
We are always here to help.
Thanks to my DLC colleague Angela Calla for this article.