<p class="p1">With the GTA’s homes selling for almost 20 per cent lower than they were in the spring, many transactions that were set to close are at risk.</p>
<p class="p1">Mortgage lenders (traditional banks, monoline lenders and credit unions) have begun lowering their property valuations in an attempt to get ahead of a possible continued decline. Home buyers have been seeing lenders ask for a second appraisal just before the sale closes just to be sure the value is where it was when the mortgage approval was issued.</p>
<p class="p1">With some lenders lowering their valuations by as much as 15 per cent, that’s leaving many home owners short. For example, a buyer with an accepted offer to buy a home for $800,000, may get a new appraisal value of $700,000 - that’s the new amount the lender will lend on.</p>
<p class="p1">In this case the buyer needs to come up with the extra $100,000 to close.</p>
<p class="p1">For buyers who are working with a mortgage broker they have access to a professional who has been monitoring the sale process and is usually the first to know when there is a mortgage shortfall. A <a href="http://mortgagealliance.com/stevewhite">good mortgage broker</a> will have access to secondary financing who might be able to step in and lend the difference as a second mortgage and close on time.</p>
<p class="p1">If the buyer is working with their own bank, they’ll need to begin looking for a mortgage broker or lender at the last minute and start the <a href="https://www.mortgageboss.ca/leadgeneration/add_lead.aspx?Agent_ID=11879">mortgage application</a> process from the start, likely missing their closing date.</p>
<p class="p1">Not only will the buyer possibly miss their closing date, their own bank may not allow secondary financing, causing the buyers to then find a new lender for the 1st and 2nd mortgages.</p>
<p class="p1">The moral of the story? Well, working with a mortgage professional who has access to a wide range of lenders gives buyers and their Realtors a lot more options should a purchase have problems.</p>
<p class="p1">A good mortgage broker is about solutions as much as they are about great rates. <a href="https://www.stevewhitemortgages.ca/contact-page">Contact Steve White</a> to find out how he can provide great solutions for your clients.</p>