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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Conditions of Mortgage Financing

By Tracy Head • May 5, 2025
When I work with clients that say they are writing an offer on a private sale I always talk about the benefits of working with a realtor. Realtors do so much legwork that happens behind the scenes that clients aren’t even aware of. Most times it is challenging on my end when clients try to tackle the process of writing an offer on a private sale themselves. I joke and say I am going to charge them an extra fee because of the additional work it creates on our end. I don’t actually charge a fee to be clear but I am only half kidding. When you start down the road of buying a home there are many new and unfamiliar terms you may hear. Whether you are working with a realtor or not, arguably some of the most important things you need to learn about are the “subject to” conditions to include in your offer to purchase. When you write an offer to purchase a home, your realtor will offer guidance as to the conditions you include. Common conditions you will see are:  Subject to arranging suitable financing  Subject to a satisfactory home inspection  Subject to arranging home insurance  Subject to review of strata documents  Subject to the sale of your current home If you are purchasing a rural property or are in a unique situation you may also see:  Subject to a water potability test  Subject to an inspection of the septic system  Subject to the seller finding a suitable home to purchase These lists are not all-encompassing by any means. The purpose of adding conditions to your offer is to protect you in case there are any issues with the home you are looking to purchase. In previous columns I’ve written about the potential dangers of writing a subject-free offer. The high- level, quick position is that if you write a subject-free offer you’d better have cash on hand to buy the home. I have worked with several clients over the last few months that have written private offers. We do absolutely everything ahead of time to try to ensure they will be successful with their financing. These files stress clients more than you can imagine. They have to either find templates to fill out or pay a lawyer or notary to prepare the documents for them. Either way they need to quickly learn about the conditions I listed above and understand key dates involved in the buying process. The clients need to deal directly with the sellers on any issues that may arise. When you are working with a realtor they handle these issues on your behalf. A knowledgeable realtor also helps avoid issues by taking any of the personal contact and emotions out of any potential areas of conflict. Make sure you do your due diligence and have your ducks in a row as you move forward with an offer to purchase whether writing an offer with a realtor or on your own. Now that the sun has come out and the election is over I’ve seen my clients more actively shopping which is encouraging. As always, my advice is to work with a realtor that you are comfortable with and who knows your area well.

Not all lenders are created equal

By Tracy Head • April 21, 2025
Not all lenders are created equal Just as no two clients are the same, not all lenders are created equal. For the majority of clients getting the best interest rate is their primary concern. For me as a broker it is as important to find a lender that provides a smooth process from start to finish and excellent customer service once a mortgage has finalized. What do I mean by this? When new lenders pop into the mortgage market they often offer low interest rates or better compensation to encourage mortgage brokers to send files their way. Sometimes these new lenders are amazing, and sometimes not as much. Once in a while more established lenders will offer brilliant rates in order to increase the number of mortgages they have on the go. We see lenders float in and out of the competitive rate market based on how much money they have available to lend at any given time. While this can be great for clients, it can also be a nightmare. If a lender does offer rates much lower than other lenders they end up flooded with applications. They may or may not have the staff / staff with expertise to handle larger volumes and increased time pressures. If we are working on a refinance with flexible dates this isn’t necessarily a problem. If we are working on a purchase application with deadlines this can become stressful for all involved. On top of that lenders have different processes for handling the legal paperwork that goes to your lawyer’s office. Some lenders handle everything in-house and have very responsive teams to handle getting the documents to your lawyer and addressing any changes that need to be made. Other lenders hire third-party service providers to produce their documents and this adds an extra day or two to the process. As a broker I try to learn about my clients’ longer term plans and find the right fit lender-wise. I look at lenders’ policies for portability, pre-payment options, flexibility with respect to their guidelines, broker support, and equally as important client service experience after the mortgage finalizes. Does the lender have a portal? Will they allow me as a broker to help my clients or do they require clients to work with them directly for any changes? We sent applications to two newer lenders over the last month because they had fantastic rate specials available. Both files ended up being very stressful as we were down to the wire waiting for mortgage instructions to be sent to the clients’ respective lawyers. I prefer not to have to deal with last-minute stress on my files.  Rate is of course incredibly important to your long-term financial health. In my mind a smooth process before and after your purchase or refinance is also important. There are many considerations that go into choosing the right package for our clients. My recommendation one day may change the next depending on both your situation and what I am seeing behind the scenes with various lenders. I hope you had a beautiful Easter weekend!!