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Bank mortgage terms shift after financing approved.

Just so you know.


Here's a story that may arm you with some insight during your next home purchase financing.


Story outline goes like this:

Buyers have their offer accepted.

Financing is approved.

Property inspection reveals many unexpected issues, too costly to remedy.

Back to the negotiating table where a new price is agreed upon.

Deposits are paid.

Bank is notified as to the new price and the reason for it.  Bank says, “no problem – we’ll resubmit the application. It is merely a formality”.


Everything goes forward – until 3 weeks after conditions have been removed when the bank says they want to do an appraisal after all. “Head Office wants it – it’s merely a formality.”


Now the appraisal is conducted by the bank for the bank and the Buyer has to pay for it .

The appraised value comes back well above the purchase price, which is good., BUT – “head office” has decided they don’t want to do the loan at the previously agreed upon rate, because of the appraisal. Huh??

The bank now wants to provide a different mortgage product at a much higher rate – but not to worry – they’ll provide the financing as promised – it’s all “merely a formality”.


So... the Buyer now has to accept a mortgage at a higher interest rate because with just one week to possesion, there is no time to shop for a different lender.  Hmmm …. 


I wonder if it's merely a formality that we are regarded as 'an opportunity' to the banks instead of a customer?


Thought you should know!





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