The rules for a successful financing

When taking out a mortgage loan, choosing the financing and the lender are decisions that deserve consideration. Here’s how the Real Estate Brokerage Act protects you, if you enlist the services of real estate professionals duly authorized by the OACIQ.

At the time of the promise to purchase

You found the home that suits you with the help of a real estate broker? When making an offer to the seller, your broker will use the Promise to purchase form. This form sets out, among other things, your responsibilities as a buyer for mortgage financing, if any.

First, one of the clauses of the Promise to purchase provides that you must undertake to take in good faith, as soon as possible and at your own expense, all steps necessary to obtain a loan secured by immovable hypothec.

In this form, you and the broker must clearly indicate all the elements of the financing scenario that you are looking for, namely: the amount of the loan, the interest rate not to be exceeded, the amortization period, the term required by the buyer and the period given to you to provide a copy of the mortgage lender’s undertaking to the seller. Usually, this period should be at least 14 days. Note that a mortgage pre-approval is not appropriate in this context.

In the case of a promise to purchase concerning an undivided co-ownership, the broker must also indicate the name of the financial institution to which the financing application must be made.

Here is the context. You now have the lender's choice. It can be: a caisse populaire, a bank or a private lender.

Your broker can put you in contact with a mortgage broker to look for a mortgage loan that meets the terms of your promise to purchase. He could also refer you to a specific lender. But note that under his code of ethics, your broker must disclose in writing any financial interest related to such a referral.

Good to know

• Any amount received as an advance on remuneration or disbursements will be paid without delay into the general trust account of the broker or agency, and can be withdrawn only when the services have been rendered or the disbursements have been incurred, and these amounts have been billed and sent to or accepted by the borrower.
• Like any other document that forms an integral part of your potential promise to purchase, the Declarations by the seller of the immovable form and all related documents must be sent to the hypothecary lender to enable the lender to set the terms of the loan to be extended to you in full possession of the facts.
• Unless otherwise stipulated, the contract expires 30 days after being signed.

For more information, read the following article:

• Promise to purchase and financing of an immovable - The importance of the section relating to new hypothecary loan

We wish you a very successful transaction!

For any questions, please contact Info OACIQ.