How is the Offer to Purchase Used in the Mortgage Process?
October 7, 2009 12:18 pm Book, Employed Persons, First Time Home Buyer, Interest RatesThe Offer to Purchase is a very important document for when people are buying and selling houses.
CMHC defines the Offer to Purchase as “a written contract setting out the terms under which the buyer agrees to buy the home. If the Offer to Purchase is accepted by the seller, it forms a legally binding contract that binds those who have signed it to certain terms and conditions.”
It is the official document that shows to all parties involved the complete terms of the sale. For example is shows the following:
- Property address;
- Purchaser;
- Seller;
- Purchase price;
- Deposit amount;
- Possession date;
- Financing condition date;
- and many more important pieces of information.
The lender needs this document because it shows them that the person really is purchasing a home, for how much and when the file is closing.
Most lenders will need to see this paperwork before they will even start processing your file.
This is why it is key to arrange to have this document sent to your mortgage broker as soon as is possible. This allows the mortgage broker to add the data to your application and submit it to the lender without delay. In turn you get your approval sooner.
For further information about these important documents see (http://www.cmhc-schl.gc.ca/en/co/buho/hostst/hostst_007.cfm)
