Bank approved mortgage but later asked for additional information in order to complete my file

[Nir]

Should I send a notice of fulfilment of the financing condition to my real estate agent due to the initial mortgage approval I have from the bank or should I wait till the banks confirm they still approve the mortgage considering the additional information they asked later (like a separation agreement)?

The reason I`m asking is if I wait more I will miss my deadline to confirm the financing condition was met within 2 weeks. Is there a 99% chance the bank will not change their mind since a mortgage approval was already sent to me (and therefore no risk releasing the condition now) or should I wait? Are there negative implications if I release the condition now based on bank`s approval and later the bank says no? If the bank says no later obviously I will not be able to purchase the property. In such a case where I "have to" purchase based on the offer but can not since bank changed their mind, what is going to happen? will the bank or I be responsible with consequences or in most cases no one is affected negatively (i.e. since this happens a lot in real estate)? I understand only an experienced investor, real estate agent or banker can answer this question as the law and what actually happens in reality are sometimes completely different.

THANKS.

 

[RobMacdonald]

Hi,

Just to be clear..... Did you get an approval from the bank that did not ask for a separation agreement? And then they came back at a later date and asked for the additional document? If they approved the mortgage subject to receipt and approval of the separation agreement, then you should provide it before removing the financing condition.

You should be sure that you have an unconditional offer before removing the the financing condition. A bank does have the option to not approve an outstanding condition and if you`ve already removed subjects, only you are liable to the vendor. If you cannot arrange alternative financing at the late stage, you would be at risk of losing your deposit.

If you`re coming down to the 11th hour, and will not be able to provide the document to meet the deadline, get a second or even third opinion on your position.

 

[Nir]

Thank You Rob!

 

[Thomas Beyer]

There is alwasy risk that the bank will not give you the money .. but if you have a decent job, decent rental income on the property and not much debt .. AND IF YOUR MORTGAGE BROKER TELLS YOU: NO PROBLEM .. then you should consider taking the risk and remove conditions .. assuming
a ) the deal is a while from closing and you`ve got time .. say 4-6 weeks
b ) there is nothing "funny" about the deal
c ) your mortgage broker is competent
d ) the 1st and 2nd deposit, if lost, won`t ruin your life
e ) the deal is a good deal (i.e. if you lost it it would agrevate you to no avail ..)
f ) you have done your homework and sent all documents to the bank / broker

Anything you do in life has risks .. including crossing the street, boarding an airplane or waiving conditions on a rental property.