Understanding your Condition of Financing Date

Your condition of financing date is one of the most important milestones in your mortgage financing process. As such, there are many questions from our clients about what this term means and how it affects them.

What is a Condition of Financing Date?
Simply put, your condition of financing date is the day by which you need to have mortgage financing in place for the property you are looking to purchase. You will see this term on both your “Offer to Purchase” to the seller of the property, as well as your mortgage approval from your lender.

When you remove conditions with your Realtor (this includes your condition of financing), that means your offer is no longer dependent on whether you are financially approved. For this reason, you need to be sure that you have financing in place before this date passes and/or your conditions are removed.

Who decides what my Condition of Financing date will be?
This date is decided on between you and your Realtor when you put in an offer on a property. Often, a condition of financing date is used as leverage when there are multiple bidders on the same property because the sooner the condition of financing date, the sooner the sellers will know they have a firm sale.

How do I make sure my Condition of Financing doesn’t fall through?
If you take a look at your mortgage approval, there will be a list of conditions that must be met before your financing is fully approved and you can remove conditions. For example, income documentation and down payment verification are two common conditions that lenders place on their mortgage approvals.

At our office, we employ a team of Brokerage Assistants who are here to help review your documents and submit them on your behalf. Once all outstanding conditions have been met and approved by the lender, our team sends a personalized letter to your Realtor letting them know that the requirements have been met and they are free to remove conditions of financing at that time.

Can I waive my Condition of Financing? What happens if my financing falls through?
The short answer here is yes. However, you should take care to use extreme caution if this is the route you choose to take. If you waive your financing condition so a seller will accept your offer over others and your financing falls through, you will not only lose your deposit but you may also be liable for damages to the seller in a court of law.

If you are going to waive your condition of financing, it is extremely important to talk to a mortgage professional beforehand so they can assess your financial situation and make you aware of any potential issues that might arise. When doing this, be sure that you know the difference between a pre-qualification and a pre-approval. If your bank has pre-qualified you, this may not be enough when the time comes to move forward with an application.

The mortgage process can be complicated and overwhelming, which is why we continually strive to add value to our clients by simplifying their experience. If you have any questions about applying for a mortgage, we are happy to sit down with you for a free consultation.





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