Last Minute Mortgages

Do your homework. Be prepared. Make good decisions. Don’t gamble on an outcome.

Maybe most importantly don’t rush.

These are lessons that can be applied to almost every aspect of our lives.



This week I jumped in to help another broker. A client of his had written an offer on a new home priced at $1,000,000. The client’s current home was owned free and clear (no mortgage outstanding) but was worth slightly less than that.

The broker had a mortgage arranged to cover the difference between the purchase price and the anticipated sale proceeds of the current home.

The client removed all of the subjects on his purchase before his current home was sold – basically rolling the dice and assuming it would sell.

I bet you already know where this is going. There is a plot twist though.

As it turns out, the other broker is unexpectedly away dealing with a health emergency.

The client’s original home has not yet sold.

He has to complete the purchase on his new home by the end of next week.

We scrambled this week to line up private financing to cover the shortfall needed to complete the purchase of the new home. 

The broker had urged the client not to remove subjects on the purchase until the other home was sold. I have seen the email. The client decided to move forward regardless.

This client is fortunate that he still qualifies for the new mortgage even with the current home not sold. 

The client will, however, be covering some unanticipated expenses. Between fees for the private loan and additional legal fees the client will be paying over $10,000 at closing on top of the expected closing costs for the purchase. As well, the monthly payment on the private loan is approximately $4500 per month so we are all hoping an offer comes in soon.

The thing about houses is that they make them every day. Maybe not everyday but certainly new homes come onto the market all the time. Its hard if you are emotionally attached to the idea of a shiny new home, but I lean to the conservative side and encourage my clients to look at the long term outcome should all the pieces not fall into place.

As we move into (what we expect to be) a busy spring market, I encourage you to make thoughtful decisions and not put your financial well-being at risk by jumping into something you shouldn’t.