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!