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Buying a Home: Mortgages

The majority of home buyers are not afforded the luxury of paying for a home without obtaining a loan from one of the many available lenders. As a result, it is usually a requirement that the buyer arrange a mortgage with their lender.

A buyer of real property should be aware that the requirements of the mortgage will add to the documents that need to be prepared and to the costs needed to complete the transaction of purchase and sale. For example, lenders may require that you obtain, at your expense, a water quality test or a BLC, even though you had not intended to obtain either document.

The lender will often deduct a significant amount of funds from the proceeds of the mortgage in order to pay for certain loan requirements. It is not unusual for the lender to deduct funds for the costs of appraisals, inspections, CMHC application fees and CMHC insurance premiums. In addition, if you will have your lender attend to the payment of property taxes on your behalf, then the lender may also deduct a sum of money from the mortgage proceeds in order to start a tax account. All of these deductions must be taken into account in order to determine the amount of funds that you will need to contribute in order to complete the transaction.

Your lawyer will review the lender’s terms and conditions of the loan with you to ensure that they meet with your expectations, and are in accordance with your discussions with your lender. The lawyer will also ensure that the mortgage and other loan documents are prepared correctly, the mortgage is properly registered and will report to the lender in order to obtain the necessary mortgage funds in order to complete the transaction with the seller.

Notice: The articles on our website are provided for general information purposes only and should not be relied upon as legal advice or opinion. They reflect the current state of the law as at the date of posting on the website, and are subject to change without notice. If you require legal advice or opinion, we would be pleased to provide you with our assistance on any of the issues raised in these articles.