Different Approaches to Pre-Approvals

Tracy Head • March 22, 2024

As a mortgage broker I am able to work with clients all over BC. I grew up in Mackenzie, a small community in northern BC, and still have ties to the area.


I worked with the realtors there before I moved to the Okanagan, and we continue to work together over fifteen years later.

This week we’ve seen a surge in homes selling in Mackenzie and I’ve had interesting conversations with both of the realtors I work with.


They had questions around how I figure out price points for clients when I am working on a pre-approval. More specifically, they asked about whether or not I collected documents from my clients before they had an accepted offer to purchase.

My answer was that I absolutely gather the bulk of the documents we will need ahead of sending my clients out shopping. 

I also pull credit reports about 95 per cent of the time before I send people out looking for a home.


Why?


Even with clients that I know to be squeaky clean and solid financially, over the years I’ve had to deal with surprises that might have affected their approval.


Recently I was working with a client that has been with the same employer for 25 years, has over $300,000 in his account, and whose credit score was 821 (900 is a perfect score). Slam dunk, right?


As it turned out, he has a fairly common name. At the very bottom of his credit report was an outstanding collection to an insurance provider. I was surprised to see it as I know he is meticulous with his finances.


He had never had any dealings with that particular company, and it took him almost three weeks to get confirmation from the company that it was not his debt, and another few days to have his credit bureau corrected.


Another client I worked with had everything in order and looked like she was ready to write an offer at the $650,000 price point. 

I pulled her credit report and found a vehicle loan with a payment of $785 per month. When I asked her about it she said she hadn’t mentioned it because she didn’t make the payments. She had co-signed a loan for her daughter. 


When you co-sign a loan, you are jointly and severally responsible for the amount outstanding. That means that should the other person ever default on a payment you are responsible for making the payment.


This means that we have to factor that payment in when calculating what you qualify to borrow. In her case, this dropped her purchase price considerably.


I’ve also run into situations where clients tell me how much they earn, and when they send their documents in the T4s and paystubs don’t support what they’ve told me. In one case the gentleman said he told me what he figured he would make this year.

As a general rule lenders won’t use predicted income (other than a few specialty products); they work with historical information and what can be confirmed via employment letters and contracts.

So why is all of this important?


If I send you out shopping for a home, I want to be certain that I am able to arrange a suitable option for you. If I send you out shopping for a home, you get excited about the possibilities and write an offer. Now the sellers of that home are also excited and are out looking for their next property.


We’ve tied up two or potentially more homes, and realtors have spent hours working to show homes and make magic happen to bring offers together.


If I haven’t done my due diligence and missed something that will affect your approval we have wasted a lot of time and energy for everyone involved.


Sometimes clients just want to know generally the price point they are looking at and want to know if there is anything they need to deal with before heading out shopping. If they are looking at buying a home six months or a year down the road it is a different conversation and I don’t ask for documents upfront.


When you are working on a pre-approval and your mortgage person asks for a full document package upfront, don’t roll your eyes. Fully disclose your financial situation. This helps us put you in the best position to be successful once you’ve found a home you love.


PSA: If you haven’t already dealt with the Speculation Tax Declaration, take a minute and do it today.

Tracy Head

Mortgage Broker

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Navigating Mortgage Renewals in Uncertain Times

By Tracy Head • April 2, 2026
If you’re one of the many Canadians with a mortgage renewal coming up this year, you’ve likely felt a bit of unease reading the headlines. Interest rates, inflation, global tensions—it can feel like a lot. After more than two decades in this industry, I can tell you this: uncertainty is nothing new in real estate or lending. What matters most is how you respond to it. The good news? You have more control than you might think. Let’s walk through a few practical, level-headed strategies to help you approach your renewal with confidence—rather than stress. 1. Start Early—Earlier Than You Think One of the biggest mistakes I see homeowners make is waiting for their lender’s renewal letter to arrive. By then, you’re already on their timeline—not yours. I recommend starting the conversation at least 4–6 months before your maturity date. This gives you time to explore options, secure a rate hold if available, and avoid being rushed into a decision. 2. Don’t Just Sign the Renewal Offer It may be convenient to simply sign and send back your lender’s offer—but convenience can come at a cost. In many cases, lenders don’t present their most competitive rates in renewal letters. Think of your mortgage like any other major expense: it deserves a second look. Even a small difference in rate can translate into thousands of dollars over your next term. 3. Consider Your Risk Tolerance—Not Just the Rate In uncertain times, it’s tempting to try to “time the market.” Fixed or variable? Short term or long term? These are important questions—but they shouldn’t be driven by headlines alone. Instead, ask yourself: Do I value stability and predictable payments? Am I comfortable with some fluctuation if it means potential savings? How long do I realistically plan to stay in this home? There’s no universal “best” option—only the best fit for your comfort level and financial goals. 4. Explore Shorter Terms as a Bridge Strategy With so much unpredictability in the global landscape, some homeowners are opting for shorter-term mortgages (1–3 years) as a way to “wait and see.” This can be a smart approach if you believe rates may stabilize or improve, but it’s important to weigh this against current pricing and your tolerance for future changes. Think of it less as gambling on rates—and more as maintaining flexibility. 5. Use This Opportunity to Restructure A renewal isn’t just about accepting a new rate—it’s a chance to revisit your overall strategy. You might consider: Adjusting your amortization to improve cash flow or accelerate payoff Consolidating higher-interest debt into your mortgage Adding prepayment privileges to give yourself more flexibility This is your moment to align your mortgage with your current life—not the one you had five years ago. 6. Build a Small Buffer Into Your Budget Even if you secure a great rate, it’s wise to prepare for slightly higher payments—especially if you’re coming off a historically low rate. Creating a bit of breathing room in your monthly budget can reduce stress and give you options down the road. If rates drop, you’re ahead. If they rise, you’re prepared. 7. Lean on Professional Advice The mortgage landscape has become more complex, not less. Policies shift, lender appetites change, and new products emerge. A good mortgage broker doesn’t just shop rates—they help you interpret the landscape and make decisions that suit your long-term financial well-being. At the end of the day, uncertainty doesn’t have to mean instability. With the right preparation and a thoughtful approach, your renewal can be an opportunity—not a setback. If there’s one takeaway I’d leave you with, it’s this: stay proactive, stay informed, and don’t be afraid to ask questions. You’re not just renewing a mortgage—you’re shaping your financial future.  And that’s worth doing well.

Purchase Plus Improvements

By Tracy Head • March 19, 2026
Hammer, Nails… and a Mortgage That Sees Potential Over the years I’ve noticed a pattern: buyers fall into two camps. The “this house is perfect” crowd… and the “this could be perfect if we just fix a few things” crowd. Today, we’re talking about the second group—and one of the most underused tools in the Canadian mortgage world: the purchase plus improvements mortgage. What Is It (and Why Should You Care)? A purchase plus improvements mortgage lets you roll renovation costs into your mortgage at the time of purchase. Instead of draining your savings—or worse, putting renovations on a high-interest line of credit—you finance those upgrades at your mortgage rate. In plain English: you buy the house and fix it up, all in one tidy package. You get to enjoy the renovations while you live in your home, rather than scrambling to renovate or update when you are getting ready to sell. Lenders like this because you're increasing the value of the home. You should like it because you're borrowing at (usually) the cheapest rate you'll ever get. Let’s say you’ve found a home priced at $700,000. It’s solid—but a little tired. You want to: Upgrade a dated bathroom Replace an aging furnace Put on a new roof Total improvement budget: $40,000 With a purchase plus improvements mortgage, your financing is based on the “as-improved” value, meaning: Purchase price: $700,000 Improvements: $40,000 Total financed value: $740,000 Because the purchase price exceeds $500,000, the minimum down payment in Canada is not 5% flat. It’s calculated as: 5% on the first $500,000 = $25,000 10% on the remaining $240,000 = $20,000 Minimum required down payment: $49,000 Mortgage Before Insurance Total value: $740,000 Down payment: $49,000 Base mortgage: $691,000 Adding the CMHC Insurance Premium Because your down payment is under 20%, mortgage default insurance applies. At this loan-to-value (roughly 93.4%), the CMHC premium is 4%. CMHC premium: $691,000 × 4% ≈ $27,640 This premium is typically added to the mortgage, not paid upfront. Total mortgage after insurance: ≈ $712,421 What Does That Payment Look Like? Now let’s plug that into real numbers: Mortgage: $712,421 Rate: 3.99% Amortization: 25 years Estimated monthly payment: ≈ $3,750–$3,760/month (call it $3,755/month for coffee-shop accuracy). Why This Still Makes Sense Here’s where people sometimes hesitate: “Wait—I’m paying insurance and financing renovations?” Yes. And in most cases, it still works in your favour. Because: You’re financing renovations at 3.99%, not 8–10%+ You’re improving the home’s value immediately You’re avoiding the markup baked into fully renovated homes In other words, you’re not just spending money—you’re strategically improving the value of your new home. How It Actually Works Behind the Scenes Here’s the part most buyers don’t realize: You submit quotes for the renovations upfront The lender approves the total (purchase + improvements) The purchase closes as usual The renovation funds are held back by your lawyer You complete the work Funds are released once the work is verified It’s a bit of paperwork—but compared to juggling contractors and separate financing? It’s a win. Why I Recommend This More Often Than You’d Think After years in this business, I can tell you this - the “perfect home” usually comes with a premium price tag. But the “almost perfect” home? That’s where the opportunity is. With a purchase plus improvements mortgage, you can sometimes: Buy in a better neighborhood Customize the home to your taste Avoid bidding wars on fully renovated properties Finance upgrades at mortgage rates (instead of 8–10%+ elsewhere) If you’re considering this route, here’s my advice: Get detailed quotes (not ballpark guesses) Plan for a buffer—renovations love surprises Work with a broker early (this is not a last-minute add-on) And most importantly: don’t be scared of a home that needs work. Some of the best purchases I’ve seen over the years started with the phrase, “Well… it’s not perfect, but…” Final Thought A purchase plus improvements mortgage isn’t just financing—it’s strategy. It’s the difference between settling for someone else’s vision… and building your own, from day one.  And in a market like Canada’s, that kind of flexibility isn’t just nice to have—it’s powerful.