When you finally find the perfect condo or house you’ve been dreaming of and are ready to make an offer, the question arises: do you need a financing condition? The answer is simple: unless you’re able to pay for the home in cash, then yes, you definitely do.

 

The phrase “subject to financing” is a key safeguard for buyers. By making an offer “subject to financing,” you give yourself the necessary time (usually 7 to 10 business days) to ensure that you have full approval for the required funds. Your lender and mortgage insurer, if applicable, need to feel just as confident about the property as you do, and may conduct assessments to verify its value. After all, the property serves as security for the lender in case of any issues down the road.

 

Even if you have received a mortgage pre-approval, the lender could still decline your application after reviewing necessary documentation; such as income, down payment, credit report, or after reviewing the property itself. This could be due to reasons like the property being located just outside the lender’s acceptable area, concerns over past issues like a former grow op, environmental concerns, or zoning issues, or if the property’s appraisal doesn’t align with the offer you’ve made.

 

Submitting an offer without any conditions leaves both you and your family vulnerable. If the financing falls through, you risk losing your deposit and potentially being sued by the seller. That’s definitely not the happily-ever-after scenario you envisioned when you decided to make an offer. Let us help guide you through every step of the home buying process to ensure a smooth and successful purchase.