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Understanding mortgage conditions




Mortgage purchase conditions are the sum of all the agreements made between a person selling a home and the person buying it. Whether you are buying someone else's home or putting money down on a home that is under construction, conditions are written into a mortgage to protect everyone. They spell out what to do in the event of something unexpected and they make it clear what's included in the sale of a home. For example, what if the seller can't find a new home before the closing date? Does the buyer know you are taking your grandmother's chandelier with you? Is that custom doghouse included or not? These are real-life decisions you need to address with clearly written conditions attached to the sale of every home.

If you have assembled a seasoned home-buying team, meaning a realtor, a lawyer or notary, and a Mortgage Specialist, they will guide you through these four common types of mortgage conditions to make sure everything goes smoothly.

Inspections
Buyers typically make offers conditional on the completion of a professional home inspection. Inspectors are highly trained and are required to offer you an objective assessment of the home you want to buy. An inspection may reveal a ticking time-bomb of repairs that could cost you a lot of money down the road. Sellers should expect most buyers to insist on an inspection.

Finding a new home
In a "seller's market," meaning there are not a lot of homes for sale, sellers have the advantage so prices tend to be higher than normal and competition for homes a little more intense than usual. The combination of fewer homes for sale and higher prices may make it difficult for a seller to find a new home. Conditions that allow sellers to extend the closing date of the sale if they have not found a new home are not uncommon.

Financing
Even the best-laid plans can get derailed if there is a sudden change in your financial position between the time when a mortgage is pre-approved and the time it gets finalized. When this happens, it's often in the best interest of both the buyer and seller to have conditions written into the deal that make it possible to cancel the transaction.

Condo status certificate
A status certificate is an important document for anyone buying a condominium. You, your realtor, or your lawyer may request it any time and there is typically a $100 fee. It describes the unit you are buying, whether or not you get a parking spot or a locker, and if so, where it is. It also includes details about the building, such as the ownership structure, operating budget for maintenance, proof of insurance, bylaws and rules. Always request an up-to-date certificate from the condo corporation and consider making your offer conditional on a thorough review by your home-buying team. Estimate a week to 10 days for the condo board to provide the certificate before you and your team can review it.

Conditions exist to protect everyone and make the home-buying experience a positive one for the buyer and seller. Taking the time to understand the most common conditions and when to include them in your agreements and offers is worth every minute. A Meridian Mortgage Specialist can help you understand mortgage conditions and how they lead to a smooth sale. We're in your community, so it's easy to find us.

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