Your budget and the property both matter
A pre-approval is a useful starting point for your search. It gives you direction when we look at homes in Dollard-des-Ormeaux and the West Island. But a lender still needs to review the property and the purchase details before confirming the loan.
That is why I would not treat a pre-approval letter as a reason, on its own, to make an offer without a financing condition.
What if the appraisal comes in lower?
The price you agree to pay and the value accepted by the lender can be different. If an appraisal is required and comes in below the purchase price, it can affect the amount available to borrow.
You may need more cash than you expected, or another financing solution that the lender accepts. Before increasing an offer, I want you to understand how you would handle that possibility.
What the financing condition does
It sets out the financing requirements and gives you a period after acceptance to obtain the required lender commitment. The wording, documents and deadlines in your signed promise to purchase matter.
Do not assume the offer automatically ends if financing is refused or the deadline passes. We need to review the agreed terms and follow the required steps, with legal advice where needed.
Competing offers: keep the risk in perspective
When there is competition, it can be tempting to remove conditions to make your offer more attractive. But a stronger-looking offer can also leave you with a commitment you cannot finance.
My approach is to speak with your mortgage professional before we decide on the offer strategy. The goal is to put forward a serious offer that fits your situation, with a clear understanding of what remains outstanding.
My advice before you sign
Ask your mortgage professional what has actually been approved, what still needs to be reviewed and how much time they need for this property. Then we can discuss the financing condition and the deadline before submitting the offer.
Whether you are buying your first condo or moving into a family home, I want you to feel comfortable with the commitment you are making.
Quick questions and answers
Does a pre-approval guarantee my mortgage?
No. Financing for the specific property still needs to be confirmed, including any lender requirements that remain outstanding.
Can a low appraisal affect my down payment?
Yes. If the lender accepts a lower value than the purchase price, you may need additional cash or a different financing arrangement, subject to approval.
How long should the financing condition be?
The deadline should reflect the lender’s needs and the terms negotiated in the offer. Confirm a realistic timeframe with your mortgage professional before signing.
Who should I speak to before removing the condition?
Discuss the financing with your lender or mortgage professional and the offer with your real estate broker. A Quebec notary or lawyer can advise on your specific contractual obligations.