Buying a Home: Interest
July 14th, 2023 by SNJ
If you are arranging for part of the purchase price to be paid by way of the proceeds of a new mortgage, the process of registering the transfer of land and the mortgage documents in Manitoba may require that the transaction be closed without the mortgage funds being available to the buyer. This may result in the proceeds not being available to the seller immediately upon possession. However, most Offers to Purchase will include a term that the seller will accept a delay in receiving the mortgage monies if it is paid with interest, at the same rate as charged by the buyer’s new lender. During the time of registration, the lender has not provided you with the mortgage funds and therefore you are not paying any interest to the lender during this time.
It is the practice of law firms in Manitoba that you provide your counsel with sufficient sums of money to cover the additional interest charges to be paid to the seller from the possession date to the date of payment to the seller. The receipt of these interest funds will ensure that the seller shall be paid the interest which they are entitled to receive, as per the Offer to Purchase.
This interest can sometimes be avoided through the use of the Protocol method of closing or by purchasing Title Insurance. Your lawyer will discuss these matter more fully with you.
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.
