Closing Date: Why the Rush?

Recently, clients are visiting and asking for help, but with one common theme: the closing date is very short.  In some cases, closing is only a few weeks away.

While a short closing time is possible, in general, you must remember that there are steps involved in getting a mortgage, and several parties required to complete this task for you.

First off, I, the mortgage broker, need to receive a signed agreement of purchase and sale, and an MLS listing; this is submitted to a lender, and takes a day or two to receive a response.  If approved, the lender requests specific documents from you, such as proof of income, downpayment, etc.  If you have excellent employment and credit, this step can be a breeze.  However, if there are any issues with some part of your application (be it employment, the property or your credit bureau), it may take time to adjust.  For example, you may need to request your previous years Notice of Assessments from Revenue Canada, and it can take up to three weeks for you to receive these documents in the mail, or your credit bureau may show a car loan that you actually paid off as unpaid, and you will have to request proof from your dealership that it is in fact paid.  As you can see, there are many scenarios where unforeseen problems will need to be solved with additional documents, which can take time to process.

Once all documents are received and accepted by the lender, then the lawyer will be instructed.  The lawyer will also need time to do all that the lender and the law requires.

Therefore, I try to encourage closing dates to be at least one month ahead.  The mortgage approval process has a domino effect, no matter how short or long of a closing, my expectation is that the client will be prompt with getting required documents in to me, so the lender can be satisfied, so the lawyer can be instructed, so the client gets their mortgage done in time.

Moreover, this process is the same for a debt consolidation mortgage (refinance).   Try not to wait until the pressure is on and overwhelming you before seeking out assistance with your debt or home purchase.  The broker, the lender and the lawyer cannot act instantaneously. Provide time to do your mortgage correctly, so you can get back to your life, with significantly less stress.