Real Estate

MORTGAGE EXPERTS: When will I know if i am receiving a firm approval by the lender?

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  • Feb 15th, 2021 10:47 pm
[OP]
Jr. Member
Nov 2, 2017
107 posts
7 upvotes

MORTGAGE EXPERTS: When will I know if i am receiving a firm approval by the lender?

Good Morning,

I received a commitment letter from the lender which has these terms:

"Additional terms and conditions
You will sign all documentation at your legal representative's office or through a remote agent signing prior to closing. You will need to bring valid wID ith you please confirm the reID quirements with your broker or legal representative. In order
to ensure this mortgage loan will advance as scheduled, ALL conditions must be satisfied no less than 10 business days
prior to closing. In the case of a purchaset ransaction, if all conditions are not satisfied within this timeframe, we may
require you to extend your closing date and provide us with your amended purchase and sale agreement.
We reserve the right to verify any information received and at any time, we we may require additional information or decline
the application if we are not satisfied with the information received."

My broker says it is a firm approval, but can the lender still decline it at any stage?

How do I know if its a firm approval?

Thanks,
17 replies
Deal Addict
Jan 15, 2017
3759 posts
3170 upvotes
Generally a firm mortgage approval is one in which the lender has agreed that all the conditions have been met and you are simply awaiting the closing. Are you at this point?
Deal Guru
User avatar
Mar 23, 2008
11905 posts
8157 upvotes
Edmonton
Getbread wrote: Good Morning,

I received a commitment letter from the lender which has these terms:

"Additional terms and conditions
You will sign all documentation at your legal representative's office or through a remote agent signing prior to closing. You will need to bring valid wID ith you please confirm the reID quirements with your broker or legal representative. In order
to ensure this mortgage loan will advance as scheduled, ALL conditions must be satisfied no less than 10 business days
prior to closing. In the case of a purchaset ransaction, if all conditions are not satisfied within this timeframe, we may
require you to extend your closing date and provide us with your amended purchase and sale agreement.
We reserve the right to verify any information received and at any time, we we may require additional information or decline
the application if we are not satisfied with the information received."

My broker says it is a firm approval, but can the lender still decline it at any stage?

How do I know if its a firm approval?

Thanks,
The lender can revoke the mortgage at any time prior to the mortgage being advanced, if your financial situation changes materially (i.e. you lose your job). But I think this is as firm as you’ll get, I think.

C
Deal Addict
Oct 27, 2012
2141 posts
3334 upvotes
Toronto
If the instructions have been sent to my lawyer, is that pretty much firm?

There are no additional T&Cs to fulfill in any of the documents and my rep confirmed that there's nothing left to do as the appraisal, employment check and down payment verification has been done. I was expecting them to do another credit and/or employment check pre-closing?
Member
Aug 22, 2016
438 posts
237 upvotes
If instructions are received by the lawyer, it is pretty much firm. Usually the next day, the lawyer should send you all the details and final amount that you have bring to the lawyers office to get the keys on the day of closing.
Deal Addict
Oct 27, 2012
2141 posts
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Toronto
arbytor wrote: If instructions are received by the lawyer, it is pretty much firm. Usually the next day, the lawyer should send you all the details and final amount that you have bring to the lawyers office to get the keys on the day of closing.
Thanks! I was just a bit skeptical given that the bank actually sent instructions almost a month ago (they've been amended since), 6 weeks before closing when I hear normally it's sent much closer to the closing date.
Deal Guru
Feb 29, 2008
13881 posts
10152 upvotes
ozzie16 wrote: If the instructions have been sent to my lawyer, is that pretty much firm?

There are no additional T&Cs to fulfill in any of the documents and my rep confirmed that there's nothing left to do as the appraisal, employment check and down payment verification has been done. I was expecting them to do another credit and/or employment check pre-closing?
Curious about this. I want to make a few large purchases on the credit card but don’t want to risk anything. Already have the approval and satisfied the conditions. Just waiting on closing date next week. But I gotta buy stuff.
Deal Addict
Oct 27, 2012
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Toronto
JayLove06 wrote: Curious about this. I want to make a few large purchases on the credit card but don’t want to risk anything. Already have the approval and satisfied the conditions. Just waiting on closing date next week. But I gotta buy stuff.
Yeeeep I feel ya. I've been in a mode where I am making a credit card purchase, logging in to my account and paying it off immediately. Don't want to jeopardize anything.
Deal Addict
Jul 11, 2010
1175 posts
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Toronto
Do not make any credit card purchases until after you have closed. If your debt ratios are close to the maximums more debt could push them past the limit. The lender could pull your approval at the the last minute.
Doug Boswell
intelliMortgage Inc. Brokerage #12326
FSRA #MO09002332
Member
Aug 22, 2016
438 posts
237 upvotes
ozzie16 wrote: Thanks! I was just a bit skeptical given that the bank actually sent instructions almost a month ago (they've been amended since), 6 weeks before closing when I hear normally it's sent much closer to the closing date.
In my case the instructions went to my lawyer 4 days before the closing. 6 weeks before seem like a lot of time and you may want to recheck with the lawyer if they are the final instructions from the bank. what would you do if you shop around and find a better deal?
Deal Addict
Oct 27, 2012
2141 posts
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Toronto
arbytor wrote: In my case the instructions went to my lawyer 4 days before the closing. 6 weeks before seem like a lot of time and you may want to recheck with the lawyer if they are the final instructions from the bank. what would you do if you shop around and find a better deal?
Yes they are final instructions. In fact right now two lenders have sent final instructions for my file. They have just provided updated instructions each time there was a change in terms, which in my case was simply a lower rate.
Deal Addict
Mar 2, 2017
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JayLove06 wrote: Curious about this. I want to make a few large purchases on the credit card but don’t want to risk anything. Already have the approval and satisfied the conditions. Just waiting on closing date next week. But I gotta buy stuff.
I am not an expert, but anecdotally I don't think these should be an issue unless we are talking tens of thousands. What could become an issue (I've seen this happen) is taking on a car financing/lease as it changes your ability to carry assuming you were borrowing the max you were eligible for.
Realtor, Investor, CPA
Deal Guru
Feb 29, 2008
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RichmondCA wrote: I am not an expert, but anecdotally I don't think these should be an issue unless we are talking tens of thousands. What could become an issue (I've seen this happen) is taking on a car financing/lease as it changes your ability to carry assuming you were borrowing the max you were eligible for.
I figured so. Just want to start getting started on blinds and appliances and such. Would hate to have to wait till I move in to do that stuff. I remember the last condo I bought for myself I was a single man and didn’t get blinds until many months later. With a wife and kids you can’t get away with that Face With Stuck-out Tongue And Tightly-closed Eyes
Deal Addict
Mar 2, 2017
1129 posts
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Toronto
Just do the standard Markham move in hack and throw up some bedsheets.
Realtor, Investor, CPA
Deal Addict
Oct 27, 2012
2141 posts
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Toronto
RichmondCA wrote: Just do the standard Markham move in hack and throw up some bedsheets.
Lol now do I feel like a moron dropping $4K for fancy zebra shades.
Deal Guru
Feb 29, 2008
13881 posts
10152 upvotes
ozzie16 wrote: Lol now do I feel like a moron dropping $4K for fancy zebra shades.
Damn, that's what I'm going for. I was hoping to keep my budget at $5K but likely not happening.
Newbie
Jan 9, 2021
53 posts
39 upvotes
ozzie16 wrote: If the instructions have been sent to my lawyer, is that pretty much firm?

There are no additional T&Cs to fulfill in any of the documents and my rep confirmed that there's nothing left to do as the appraisal, employment check and down payment verification has been done. I was expecting them to do another credit and/or employment check pre-closing?
Lawyer receiving directions is 99% firm. I know of one story where the bank rechecked the application and cancelled. Let the client know but not the lawyer. I hope your closing is very soon, all the best!

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