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PURCHASER'S
RESPONSIBILITY TO CONFIRM FINANCING ARRANGED:
It is the purchaser's responsibility to arrange any mortgage financing
which might be required to complete the purchase. Once the mortgage is
arranged, it will be the purchaser's responsibility to:
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satisfy any special requirements by the lender (e.g. - proof of
income, proof of cash down payment, payment of other debt obligations,
if required by the mortgage lender, etc.) in order to avoid last
minute financing problems on closing day;
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confirm with the mortgage lender that mortgage instructions have been
sent to the law office so that they can finalize processing the
mortgage financing and obtaining mortgage funds for closing.
PRE-APPROVAL IN WRITING:
It is highly recommended that if a buyer chooses to seek pre-approval,
(before a property is purchased), such pre-approval should be in
writing, confirming the terms of the pre-approval and mortgage.
CONDITIONAL ON FINANCING:
It is highly recommended that if financing is required (whether it has
been pre-approved or not), any agreement of purchase and sale should be
conditional upon written confirmation of financing terms from an
institutional lender.
OPEN/CLOSED MORTGAGES:
Open mortgages may usually be paid off at any time without a penalty.
Closed mortgages cannot be paid off before the end of the mortgage
maturity date without being subject to a penalty (i.e. the greater of 3
months interest or the value of the difference in interest rates).
ACCELERATED PAYMENT OPTIONS:
Institutional lenders usually offer accelerated payment options in the
form of bi-weekly or weekly payment plans that can reduce the duration
of the mortgage by paying more towards principal and thereby reducing
the total interest cost.
CMHC (CANADA MORTGAGE AND HOUSING CORPORATION) MORTGAGES:
Be aware that if a purchaser is arranging an insured mortgage (where the
cash down payment is less than 25% of the purchase price), the mortgage
lender (on closing) will deduct certain costs from the mortgage advance.
PLEASE CONFIRM with the mortgage lender as to what costs will be
deducted (For Example: 8% provincial sales tax on the mortgage
insurance premium, appraisal fee, property tax holdback or interest
adjustment, if any). For further information contact
Kattie
Tatomir, AMP, CIMBL at Invis Mortgages.
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