When buying a home, it is easy to get excited about extras that may be listed in the purchase contract. Items like hot tubs, lawn tractors, or furniture often come up, but how do lenders treat these additions when reviewing your mortgage?

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How a Purchase Contract Affects Your Mortgage Approval

Your purchase contract is primarily focused on the value of the real property, meaning the house and the land it sits on. When extras like hot tubs are included, lenders typically don’t assign them much value. A hot tub may be fixed to the property, but from a lender’s perspective, it usually doesn’t increase the appraised value of the home. Essentially, a used hot tub has little to no lending value.

Lenders Focus on the Property Value

In many cases, lenders prefer the purchase contract to reflect only the property’s value. Items like lawn tractors, appliances, or furniture are considered personal property. Lenders are not interested in financing these, and including them in the contract can sometimes complicate the mortgage approval process.

How to Handle Personal Property in a Purchase Contract

If you’re negotiating to include personal property in your home purchase, it is often better to handle those items separately from the purchase contract. For example, you may agree with the seller to purchase a lawn tractor or furniture for a nominal amount outside of the official transaction. This keeps the mortgage application clean and focused on the real estate itself.

Talk to a Mortgage Expert About Your Purchase Contract

Every situation is unique, and it’s important to structure your purchase contract properly to avoid delays or issues with your mortgage approval. If you have questions about what should or shouldn’t be included in your contract, I’m happy to help.

Whether you are preparing to buy your first home or thinking about making a move, if you’re looking to get pre-approved for a mortgage in Edmonton, fill out my online application. I’m here to help you every step of the way.

About Jason Scott, Edmonton Mortgage Broker

Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’ll be your trusted partner who will help you get the right mortgage for your family home or Investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.