There is No Such Thing as Unconditional Financing

Sabeena Bubber • November 5, 2015

This article was originally published in a local magazine that I contribute to. However I thought it would be good to share it on my blog as well!

The housing market in Vancouver is hot right now. I mean really HOT. And despite what you might hear, it doesn’t appear to be cooling off anytime soon. The problem with a hot housing market is that as soon as a property gets listed, there are multiple showings with multiple offers, some (most) even over asking price… and you are left wondering how to compete. There are several things you can do to increase your chances of finding a great home within your budget, and your REALTOR® will be able to work with you on those… however the one thing you shouldn’t do is mess around with the condition of financing in your purchase contract.

Here is a typical hot market scenario played out: You have met with your mortgage broker (If you don’t have one, I would love to work with you), you are pre-approved for a mortgage and you are ready to start shopping for a house. As part of the pre-approval process we have looked at your employment (which is excellent), your credit (which is spotless) and your downpayment (which is substantial). Everything is in place and you are confident. Your REALTOR® emails you an MLS listing, property looks amazing, you view it within 6 hours and you are ready to make an offer. Then you find out that there are already 3 offers submitted and it looks like you have to put your best offer in or risk losing out.

So the question becomes, “What does my best offer actually look like?” well… usually a large deposit combined with an offer that has minimal conditions is always best, right? So you keep removing conditions until you come down to the last condition. The condition of financing. You then think to yourself “My preapproval went really well, I have a great job, I have excellent credit and a huge downpayment, why wouldn’t they lend money to me?”

Don’t make the fatal mistake of believing that mortgage financing is solely conditional on you, the applicant. You also have to understand that financing requires an in depth assessment of the property as well. So when you go and put a deposit down on a property accompanied by an unconditional offer, the second the seller accepts your offer, you are contractually obligated to purchase that property. But what happens when you can’t find a lender to finance the property? Well… you would lose your deposit and face the chance of being sued. A very ugly situation.

There are many reasons a property might not be suitable for a lender, they include: asbestos, knob and tube wiring, aluminum wiring, underground oil tanks, irregular zoning, former grow ops, former drug labs, properties with foundation issues, and so on. The truth is, it’s impossible to know why a property might be declined so here is some advice:

There is no such thing as unconditional financing, the only time you should feel confident writing an unconditional offer is when you have enough cash in the bank to cover the purchase entirely. If you lose an opportunity to purchase a property because you wouldn’t take a risk and chance losing your deposit, you are better off!

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What You Need To Know About Co-Signing A Mortgage

By Sabeena Bubber • April 2, 2025

So you’re thinking about co-signing on a mortgage? Great, let’s talk about what that looks like. Although it’s nice to be in a position to help someone qualify for a mortgage, it’s not a decision that you should make lightly. Co-signing a mortgage could have a significant impact on your financial future. Here are some things to consider. You’re fully responsible for the mortgage. Regardless if you’re the principal borrower, co-borrower, or co-signor, if your name is on the mortgage, you are 100% responsible for the debt of the mortgage. Although the term co-signor makes it sound like you’re somehow removed from the actual mortgage, you have all the same legal obligations as everyone else on the mortgage. When you co-sign for a mortgage, you guarantee that the mortgage payments will be made, even if you aren’t the one making them. So, if the primary applicant cannot make the payments for whatever reason, you’ll be expected to make them on their behalf. If payments aren’t made, and the mortgage goes into default, the lender will take legal action. This could negatively impact your credit score. So it’s an excellent idea to make sure you trust the primary applicant or have a way to monitor that payments are, in fact, being made so that you don’t end up in a bad financial situation. You’re on the mortgage until they can qualify to remove you. Once the initial mortgage term has been completed, you won’t be automatically removed from the mortgage. The primary applicant will have to make a new application in their own name and qualify for the mortgage on their own merit. If they don’t qualify, you’ll be kept on the mortgage for the next term. So before co-signing, it’s a good idea to discuss how long you can expect your name will be on the mortgage. Having a clear and open conversation with the primary applicant and your independent mortgage professional will help outline expectations. Co-signing a mortgage impacts your debt service ratio. When you co-sign for a mortgage, all of the debt of the co-signed mortgage is counted in your debt service ratios. This means that if you’re looking to qualify for another mortgage in the future, you’ll have to include the payments of the co-signed mortgage in those calculations, even though you aren’t the one making the payments directly. As this could significantly impact the amount you could borrow in the future, before you co-sign a mortgage, you’ll want to assess your financial future and decide if co-signing makes sense. Co-signing a mortgage means helping someone get ahead. While there are certainly things to consider when agreeing to co-sign on a mortgage application, chances are, by being a co-signor, you'll be helping someone you care for get ahead in life. The key to co-signing well is to outline expectations and over-communicate through the mortgage process. If you have any questions about co-signing on a mortgage or about the mortgage application process in general, please connect anytime. It would be a pleasure to work with you.

Get Protection From A Pre-Approval

By Sabeena Bubber • March 26, 2025

There is no doubt about it, buying a home can be an emotional experience. Especially in a competitive housing market where you feel compelled to bid over the asking price to have a shot at getting into the market. Buying a home is a game of balancing needs and wants while being honest with yourself about those very needs and wants. It’s hard to get it right, figuring out what’s negotiable and what isn’t, what you can live with and what you can’t live without. Finding that balance between what makes sense in your head and what feels right in your heart is challenging. And the further you are in the process, the more desperate you may feel. One of the biggest mistakes you can make when shopping for a property is to fall in love with something you can’t afford. Doing this almost certainly guarantees that nothing else will compare, and you will inevitably find yourself “settling” for something that is actually quite nice. Something that would have been perfect had you not already fallen in love with something out of your price range. So before you ever look at a property, you should know exactly what you can qualify for so that you can shop within a set price range and you won’t be disappointed. Protect yourself with a mortgage pre-approval. A pre-approval does a few things It will outline your buying power. You will be able to shop with confidence, knowing exactly how much you can spend. It will uncover any issues that might arise in qualifying for a mortgage, for example, mistakes on your credit bureau. It will outline the necessary supporting documentation required to get a mortgage so you can be prepared. It will secure a rate for 30 to 120 days, depending on your mortgage product. It will save your heart from the pain of falling in love with something you can’t afford. Obviously, there is nothing wrong with looking at all types of property and getting a good handle on the market; however, a pre-approval will protect you from believing you can qualify for more than you can actually afford. Get a pre-approval before you start shopping; your heart will thank you. If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Your Guide To The A First Home Savings Account (FHSA)

By Sabeena Bubber • March 19, 2025

Dreaming of owning your first home? A First Home Savings Account (FHSA) could be your key to turning that dream into a reality. Let's dive into what an FHSA is, how it works, and why it's a smart investment for first-time homebuyers. What is an FHSA? An FHSA is a registered plan designed to help you save for your first home taxfree. If you're at least 18 years old, have a Social Insurance Number (SIN), and have not owned a home where you lived for the past four calendar years, you may be eligible to open an FHSA. Reasons to Invest in an FHSA: Save up to $40,000 for your first home. Contribute tax-free for up to 15 years. Carry over unused contribution room to the next year, up to a maximum of $8,000. Potentially reduce your tax bill and carry forward undeducted contributions indefinitely. Pay no taxes on investment earnings. Complements the Home Buyers’ Plan (HBP). How Does an FHSA Work? Open Your FHSA: Start investing tax-free by opening your FHSA. Contribute Often: Make tax-deductible contributions of up to $8,000 annually to help your money grow faster. Withdraw for Your Home: Make a tax-free withdrawal at any time to purchase your first home. Benefits of an FHSA: Tax-Deductible Contributions: Contribute up to $8,000 annually, reducing your taxable income. Tax-Free Earnings: Enjoy tax-free growth on your investments within the FHSA. No Taxes on Withdrawals: Pay $0 in taxes on withdrawals used to buy a qualifying home. Numbers to Know: $8,000: Annual tax-deductible FHSA contribution limit. $40,000: Lifetime FHSA contribution limit. $0: Taxes on FHSA earnings when used for a qualifying home purchase. In Conclusion A First Home Savings Account (FHSA) is a powerful tool for first-time homebuyers, offering tax benefits and a structured approach to saving for homeownership. By taking advantage of an FHSA, you can accelerate your journey towards owning your first home and make your dream a reality sooner than you think.