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The-Mortgage-Gal

Getting ahead of yourself when buying a home

Last minute mortgages

Do your homework. Be prepared. Make good decisions. Don’t gamble on an outcome and maybe, most importantly, don’t rush. These are lessons that can be applied to almost every aspect of our lives.

Last week. I jumped in to help another mortgage broker. A client of his wrote an offer on a new home priced at $1 million. The client’s current home was owned free and clear (no mortgage outstanding) but was worth slightly less than that.

The broker had a mortgage arranged to cover the difference between the purchase price and the anticipated sale proceeds of the current home. The client removed all of the subjects on his purchase before his current home was sold – basically rolling the dice and assuming it would sell.

I bet you know where this is going. There was a plot twist though.

As it turned out, the other broker was unexpectedly away dealing, with a health emergency. The client’s original home had not yet sold and he had to complete the purchase on his new home by the end of the following week. We scrambled to line up private financing to cover the shortfall needed to complete the purchase of the new home.

The broker had urged the client not to remove subjects on the purchase until the other home was sold. I have seen the email. The client decided to move forward regardless. He was fortunate he still qualified for the new mortgage, even with the current home not sold.

The client would, however, cover some unanticipated expenses. Between fees for the private loan and additional legal fees the client will be paying more than $10,000 at closing on top of the expected closing costs for the purchase. As well, the monthly payment on the private loan will be approximately $4,500 per month, so we are all hoping an offer comes in soon.

The thing about houses is more are built all the time, maybe not everyday but certainly new homes come onto the market regularly. It’s hard if you are emotionally attached to the idea of a shiny new home, but I lean to the conservative side and encourage my clients to look at the long-term outcome, should all the pieces not fall into place.

As we move into what we expect to be a busy spring market, I encourage you to make thoughtful decisions and not put your financial well-being at risk by jumping into something you shouldn’t.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.



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About the Author

Tracy Head helps busy families get a head start on home ownership.

With today’s increasingly complicated mortgage rules, Tracy spends time getting to know her clients and helps them to better understand the mortgage process. She supports her clients before, during, and after their mortgage is in place.

Tracy works closely with her clients, offering advice and options. With access to more than 40 different lenders. She is able to assist with residential, commercial, and reverse mortgages in order to match the needs of her clients with the right mortgage package.

Tracy works hard to find the right fit for her clients and provide support for years down the road.

Call Tracy at 250-826-5857 or reach out by email [email protected]

Visit her website at www.headstartmortgages.com

Download her app: Headstart Mortgage Architects

 

 



The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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