By Anthony Harte, Dream Homes & Condos Magazine
Conditional approval
A conditional approval is a commitment that is binding on both the mortgagor (client) and the mortgagee (bank/financial institution) providing the financing, so long as all conditions have been satisfied and it is executed (signed) by both parties or authorized representatives. The conditional approval, typically, outlines the length of time of the commitment and the relevant amounts of the loan or mortgage. The more relevant information that the conditional approval outlines are those conditions which must be met to make the commitment a firm or unconditional approval. When the conditions have been satisfied, the institution will provide an addendum or schedule to the original commitment outlining that the file is complete or the conditions have been met. At this stage of the process, you are guaranteed financing just as long as you desire it.
What does a decline mean?
The decline is a response provided by a central credit granting centre or by an automated credit granting system. A decline suggests that an application for a specific product was refused as the applicant(s) may not meet the specific criteria for that product. In some cases, where an adjudicator (credit assessment officer) has the time, they may suggest what alternate products the applicant may apply for, but in the case of an average busy and/or hectic day, the adjudicator is only there to assess the applicant’s ability to meet specific criteria for the product they are requesting, given the companies, and in some cases, government guidelines. It is up to the personal banking officer, broker or financial advisor to assess the file and determine what alternate options exist. Typically, during the process of re-assessment of a request, clients receive varied explanations or inconsistent responses from the advisors or representatives, sometimes resulting in confusion or frustration. Ask your representative to provide two or more solutions in the initial stages of your loan interview /financial needs assessment.
Where do you go from here?
In some cases, it is not possible or practical to get a loan or related financing immediately; under these circumstances it is important to get financial advice which considers your current concerns as well as future needs. Usually a long term financial plan incorporating a series of steps which might include any combination of the following options: Budgeting, additional income sourcing, financing, career change, roommate/tenant or additional schooling.
Become proactive with your economic outlook and stay in control of your financial future, using the resources available to all consumers, and with a little faith you can overcome all financial adversity.
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Contact the Jeffrey Team for more information – 416-388-1960