Mortgage Financing

Whether purchasing a new home, a condominium or even a piece of land, all real estate transactions generally require the future owner to make a down payment of at least a portion of the purchase price implying that he must borrow the difference before moving ahead with the acquisition.

A promise to purchase typically contains a clause indicating that the sale is conditional on the approval of a mortgage within a specified period of time.  Generally, this delay is about 15 days for a conventional mortgage (based on a 20% deposit) and up to 30 days if the loan is to be insured by the CMHC or by GE Capital for example (for a down payment of 5% to 20% of the sale price).

More and more frequently, lending institutions transfer documents electronically and do much of their business with the acting notary over the Internet or by fax.  Among other benefits, this allows the process to proceed much more quickly and facilitates the direct transfer of funds into the notary’s bank account.

Most lenders also offer the option of signing documents by the notary’s staff, and in cases where the signature of a bank representative is required, the lender generally offers to sign the mortgage documents in any one of their branches, except for specific commercial loan.

Most of the time the lending institution requires a current land survey certificate.  For properties located in the Laurentians, a water quality test and a letter indicating that the sanitary installations (septic tanks) are in conformity with  municipal by-laws may also be necessary.

Finally, all well-advised buyers should be aware and informed with regard to the financing conditions and mortgage rates of various lenders.  The competition for mortgages is fierce, and substantial savings can be made by those who know how to negotiate.

For more information, don’t hesitate to contact me at  450-227-7077 cell.514-688-3131 or by email at info@lecourtierdunord.com

Michel Labrèche Notaire

About the Author: Me Michel Labrèche. This column was prepared by Mtre Michel Labrèche, notary, practising in Saint-Sauveur-des-Monts and Laval since 1983. Me Labrèche is also the president of Domaine  le Sanctuaire des Lacs. For more information please see www.monlac.com.