A topsy turvy mortgage world

Tracy Head • September 27, 2022

Over the last few weeks, I’ve had tough conversations with a few clients.


With unprecedented rate hikes over the last few months, borrowing power and affordability for clients has declined sharply.

The housing market is softening, but not enough for the clients who need a correction the most. I had a conversation this week with one of my favourite appraisers. He said that from April to the end of June he saw a sharp correction and that he feels prices are starting to normalize now.


I feel like the housing and mortgage worlds are a bit topsy turvy right now.


One interesting (and I’m not sure that is the right word) thing that I’ve seen happen three times over the last month is backyard developers walking away from properties they wrote offers on in the first quarter of the year.


By backyard developers I mean people that have been buying up properties zoned for multi-family development on spec, hoping to flip them down the road as land assemblies or even pull together financing themselves to develop these properties.


Early in the year these people wrote subject-free offers with long closing dates (ie: September/October) in the frenzy of the spring market.


One couple accepted an offer on a home they owned with a long closing and wrote an offer to purchase another home intending to tear it down and build a fourplex on the property. Two weeks before closing their purchaser backed out and left them without the funds to complete their purchase.


They in turn looked at the decrease in value of the home (over $300,000 based on the current appraisal) they were supposed to purchase and decided they no longer wanted to move forward. They walked away from the contract.


I’m not sure of the chain reaction this caused, but most people I work with enter into these contracts in good faith. I was floored by the callous nature of these clients that choose not to move forward and am curious to see if they will be sued by the sellers.


Another challenge I’m coming across is clients who signed purchase agreements on pre-builds a year or more ago who are no longer qualifying for the financing they need because rates have increased so dramatically over the last few months.


I have four on the go that are all set to complete over the next few months. I have lost a bit of sleep over these lately. I am, however, very pleased with how the lenders have gone to bat for these clients to help make their financing work.


If you have a pre-approval or rate hold in place, or are coming to completion on a new build, I urge you to reach out to your mortgage person to confirm that your numbers still work, and that your price point hasn’t changed.


That all felt a little dark, but I really want to make sure that potential buyers know how the increased rates might affect their purchasing power. On a brighter note, I am starting to see things pick up again with more homes selling, and feel like we are moving to a more balanced market than we’ve seen over the last few years.

Tracy Head

Mortgage Broker

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By Tracy Head June 12, 2025
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By Tracy Head June 2, 2025
Its been a while since I wrote about the importance of your credit report. This topic popped up twice this week so I think a refresher is not a bad idea. When we submit a mortgage application lenders look carefully for a few specific things: Is the home you are looking to buy or refinance readily marketable / appeals to a wide range of potential buyers? Do you have your down payment in order? Do you have consistent income to repay your mortgage? Does your overall financial profile show you manage yourself responsibly? Does your credit report reflect a history of payments made on time and as agreed? When they are reviewing your credit report they are also looking for a few specific things. How long have you had active credit facilities (credit card/line of credit/mortgage etc)? Do you have a history of making your payments on time? Do you pay most of your credit card balances off regularly or do you run with cards maxed out all the time? Lenders fully understand that sometimes life happens and we can sometimes explain one-off blips or issues. If you have a consistent history of late payments that can become a bit more challenging to explain. One thing that I chat about with my clients is how making your credit card payment a few days ahead of your statement cutoff date can really help boost your score. Over the last few years it has become more common that people use their points cards for everything over the course of the month then pay their card in full once they get their statement. If you operate your credit card this way your credit report only picks up the balance as reported on your statement so it can look like you are always carrying a significant balance even though you always pay in full. For most people this is not a big deal, but if you are working on improving your credit score this small tweak can have a huge impact. The other issue that popped up this week was incorrect information on a client’s credit report. Part of her first name was missing and the birthdate was incorrect. The client was able to confirm everything on her credit bureau for me right down to previous addresses, employers, and old loans that had been paid off. Lenders would not move forward until her credit report was corrected and in this case because two items were wrong the client needs to correct it herself (normally we can help make changes fairly quickly). Its always a good idea to review your credit report at least once a year to make sure that all of your information is reporting correctly. If there is an issue you can catch it early and correct it before you are in a panic midway through a mortgage application. Changing topic a wee bit as my daughters are on evacuation alert already … If you are in the process of buying a home as we move into fire season please make sure you have a clause in the agreement as to what will happen should there be an active fire nearby. Nail down your home insurance as early as possible because once there is an active fire close by securing an insurance policy can be very difficult if not impossible.