Wrong pre-approval. Try to back out of promise to purchase

May 6th, 2019 9:57 pm

#1

deadtorights [OP]: Member; Mar 3, 2012; 204 posts; 102 upvotes; Montreal, QC

May 6th, 2019 9:57 pm

Wrong pre-approval. Try to back out of promise to purchase

Hi,
Sorry I need some advice.
I was pre-approve for certain amount. I was planning to put 10 or 15% downpayment.
I fill up promise to purchase, and did the final approval and my mortgage person told me they did it wrong and forgot to add my car loan into it. Now I need 20% downpayment.
I find this un just want want to backout the promise to purchase.

Do I have any ground to do it ?
All the mortgage person calculation was done base on 10 and 15%.
Now I was pre approval for less but need to put 20%.
Can’t put 10 or 15%.

I talk to the seller and they and not willing to cancel the promise to purchase.

I live in QC

Thanks !

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May 6th, 2019 10:14 pm

#2

uberbaumer: Jr. Member; May 8, 2014; 179 posts; 93 upvotes; Toronto, ON

May 6th, 2019 10:14 pm

deadtorights wrote: ↑ Hi,
Sorry I need some advice.
I was pre-approve for certain amount. I was planning to put 10 or 15% downpayment.
I fill up promise to purchase, and did the final approval and my mortgage person told me they did it wrong and forgot to add my car loan into it. Now I need 20% downpayment.
I find this un just want want to backout the promise to purchase.

Do I have any ground to do it ?
All the mortgage person calculation was done base on 10 and 15%.
Now I was pre approval for less but need to put 20%.
Can’t put 10 or 15%.

I talk to the seller and they and not willing to cancel the promise to purchase.

I live in QC

Thanks !

Uh, did you waive the financing clause?

... Because that's the exact reason it's there.

Why should they let you back out?

A semi-competent prole, having worked in mortgages at a "Big Bank" for a day or two.

May 6th, 2019 10:42 pm

#3

deadtorights [OP]: Member; Mar 3, 2012; 204 posts; 102 upvotes; Montreal, QC

May 6th, 2019 10:42 pm

The financial clauses still there

May 6th, 2019 10:46 pm

#4

FatemehR: Newbie; Apr 4, 2019; 5 posts

May 6th, 2019 10:46 pm

deadtorights wrote: ↑ The financial clauses still there

If the clause is still not waived, then it is easy. Just dont sign the fulfillment form. The deal will fall through. You get your deposit back

May 6th, 2019 10:57 pm

#5

deadtorights [OP]: Member; Mar 3, 2012; 204 posts; 102 upvotes; Montreal, QC

May 6th, 2019 10:57 pm

You mean the bank approval form, the final one ?

May 6th, 2019 11:05 pm

#6

MrCeddy: Member; Feb 12, 2008; 212 posts; 191 upvotes; Toronto

May 6th, 2019 11:05 pm

If your confused on which forms to sign.. you should lean on your lawyer not rfd... if dont have a lawyer.. getting one is the best advice you will receive here.

+1

May 6th, 2019 11:05 pm

#7

oasis100: Deal Fanatic; Mar 27, 2004; 5100 posts; 3134 upvotes; Toronto

May 6th, 2019 11:05 pm

is your deal to buy the home conditional on financing???

Full-time Realtor

May 6th, 2019 11:06 pm

#8

FatemehR: Newbie; Apr 4, 2019; 5 posts

May 6th, 2019 11:06 pm

deadtorights wrote: ↑ You mean the bank approval form, the final one ?

I am confused now as to what clause you are talking about. There is normally a finance condition on the purchase agreement (between you and seller) that gives you 5-10 days to secure your mortgage. If you have not signed the fulfillment form (waiving the finance condition) you can back out of the deal (no need to talk to the seller). If you have waived the condition on the purchase agreement then it is very difficult to back out. Talk to your lawyer and/or look for an alternative lender for mortgage with a higher TDS ratio.

May 7th, 2019 12:27 am

#9

JayLove06: Deal Guru; Feb 29, 2008; 13878 posts; 10152 upvotes

May 7th, 2019 12:27 am

Happened to me before but the guy forgot to add a rental property. This was like a few days away from closing. I'm still mad about that. I'm always nervous at closing because some fool might have forgotten to add/remove something.

+1

May 7th, 2019 1:30 am

#10

xiaobao: Deal Addict; Dec 16, 2012; 2537 posts; 471 upvotes; Vancouver

May 7th, 2019 1:30 am

@deadtorights

Have you removed subjects? IE things that you or the seller need to do before the deal becomes final such as you getting proper financing, seller has to fix the broken light?

May 7th, 2019 4:02 am

#11

tmkf_patryk: Deal Addict; Dec 27, 2007; 3417 posts; 1002 upvotes; Edmonton

May 7th, 2019 4:02 am

Sell the car, pay off the loan, buy a beater and fix it up yourself, buy the house for the down payment you wanted. Win win situation. You have house and no car loan

warming up the earth 1 gas fill-up at a time...
You only live once, get a v8

+2

May 7th, 2019 8:27 am

#12

BrokeMillennial: Member; Jan 7, 2019; 313 posts; 289 upvotes

May 7th, 2019 8:27 am

He says he's in Quebec, so i'm not sure if the rules are different there.

On your House Purchase and Sale Agreement there is a financing clause which says if you do not get bank financing in place, you can back out of the home purchase and get back your deposit.

If that clause is still in effect, tell your real estate agent and they will complete the remaining work necessary.

If that clause has expired, you will either need to get rid of the car by selling it or transferring it to someone else because you are on the hook for the house now.....Unless you want to lose your house deposit.

Remember to always Thumbs Up good responses! Spread positively.

May 7th, 2019 7:36 pm

#13

CdnRealEstateGuy: Deal Fanatic; Feb 2, 2014; 8587 posts; 2453 upvotes; Toronto

May 7th, 2019 7:36 pm

deadtorights wrote: ↑ Hi,
Sorry I need some advice.
I was pre-approve for certain amount. I was planning to put 10 or 15% downpayment.
I fill up promise to purchase, and did the final approval and my mortgage person told me they did it wrong and forgot to add my car loan into it. Now I need 20% downpayment.
I find this un just want want to backout the promise to purchase.

Do I have any ground to do it ?
All the mortgage person calculation was done base on 10 and 15%.
Now I was pre approval for less but need to put 20%.
Can’t put 10 or 15%.

I talk to the seller and they and not willing to cancel the promise to purchase.

I live in QC

Thanks !

Most of the replies here don't apply to QC.

In QC, you're supposed to provide the seller with a final letter of unconditional approval before the sale goes firm within "x" number of days. Since you cannot provide this, deal will be void and you will get your deposit back.

Unlike Ontario where you have the option of putting in the financing condition, it is mandatory in QC.

How did your deal go firm without this being provided to the seller? This does not make sense.

Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

May 7th, 2019 7:51 pm

#14

deadtorights [OP]: Member; Mar 3, 2012; 204 posts; 102 upvotes; Montreal, QC

May 7th, 2019 7:51 pm

Thanks I been stressing and not sleeping due to this.
So I can let it go until expiration date end and the contract will be void and get my downpayment back. I also had an condition to inspect the building which I didn’t do because i found not bank won’t accept 10-15% downpayment anymore and I can’t put more then that.

It went firm because at the bank we did pre approval for 15%. The bank didn’t consider my car loan. So when doing to final then they realize it.

May 7th, 2019 9:39 pm

#15

Mosho1: Member; Dec 23, 2012; 328 posts; 329 upvotes; RICHMOND HILL

May 7th, 2019 9:39 pm

is it firm or not? firm means conditions are waived, it's very hard to understand what the status of your deal is.

+1

May 7th, 2019 10:31 pm

#16

gwill211: Member; Nov 5, 2009; 225 posts; 139 upvotes

May 7th, 2019 10:31 pm

wheres your lawyer and realtor in helping you? You seem rather clueless as to what the process is when buying. Did you buy without any help??

Let me guess. You didnt use a realtor to save a few bucks??

+1

May 8th, 2019 5:19 am

#17

deadtorights [OP]: Member; Mar 3, 2012; 204 posts; 102 upvotes; Montreal, QC

May 8th, 2019 5:19 am

In quebec,
It said, promise of purchase is accepted conditional to mortgage approval.
Not sure what you mean by firm.

May 8th, 2019 8:31 am

#18

Jon Lai: Deal Expert; May 30, 2005; 45018 posts; 5571 upvotes; Richmond Hill

May 8th, 2019 8:31 am

deadtorights wrote: ↑ In quebec,
It said, promise of purchase is accepted conditional to mortgage approval.
Not sure what you mean by firm.

Firm means you sent a letter to the seller or the sellers lawyer saying it is firm. Usually you agreed to X amount of days you would send this letter after they accept your offer, typically within 1-2 weeks. If it’s been longer than that then it doesn’t make sense if you haven’t sent the letter or if the seller hasn’t pushed you to firm up the deal.

Artisan woodworker crafting live edge tables, end grain cutting boards, and other home decor
Silver Coins | Philips Wake-Up Light with Radio | Heatware

May 8th, 2019 8:42 am

#19

KanataKG: Deal Fanatic; Nov 22, 2015; 5732 posts; 5213 upvotes

May 8th, 2019 8:42 am

deadtorights wrote: ↑ In quebec,
It said, promise of purchase is accepted conditional to mortgage approval.
Not sure what you mean by firm.

Okay, so you signed an Agreement of Purchase and Sale conditional to mortgage approval.

So then, you went to the bank, they said you would be pre-approved....

Did you go back to the seller/agent to confirm that your mortgage has been pre-approved??

If you went back to confirm that your mortgage is pre-approved, then you've waived the condition, and your deal is now FIRM.

+1

May 8th, 2019 9:10 am

#20

torspiker: Sr. Member; Sep 16, 2010; 871 posts; 310 upvotes; Toronto

May 8th, 2019 9:10 am

This thread is so confusing with the OP not sure of where he's at. Not even sure if OP has a lawyer and an agent too. Those would be his first point of contact before losing sleep over it and coming here, imho. Good luck, OP.