Mortgage Incentives, Buyers Beware
November 20th, 2008In this time of a declining activity and prices in the real estate, there are numerous incentives being offered to buyers from developers, Vendors, Banks etc.
These can range form such things as the Developer or Vendor paying the commissions on Selling your current home to cash back and new cars.
There are a few reasons to be careful of these.
1. What ever incentive you are receiving is probably built into the price somewhere, so you really are paying for it.
2. Banks may look at the value of what you are receiving and deduct it form the purchase price. For example, if you are given a $20,000 car they may deduct $20,000 for the purchase price before calculating the mortgage amount. So effectively you are buying the car.
3. The most important thinking to look at is what you are buying, make sure it fits what you are looking for and the price is reasonable. The incentives should be looked at as bonuses, not the basis for your decision.
Bottom line is you need to make an informed decision with what you are buying,and you need to be prepared for what the bank will finance and what they will not, you don’t want to be caught when it is too late.
For more info on this take a look at the following article:The Mortgage Brokers Association of BC urges home buyers to be cautious about real estate incentives.
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