Emotional Mortgaging

Tracy Head • May 19, 2023

For the last few months I have felt a bit of a return to normal in the mortgage world. Fixed rates have

been trending down and we’ve seen some great rate specials available. More importantly, it has felt like a more balanced market where people are taking a bit more time to do their due diligence and make more educated and thoughtful (as opposed to emotional / panicked) decisions about their home

purchases.


The last few weeks I’ve felt a subtle shift. The housing market is starting to heat up a little, in that I’ve seen a few situations where there are multiple competing offers. Inventory still seems a little low which is likely fuelling  this. I have been dealing with two families that have taken completely different approaches. The first family is looking to right-size their home and move from a condo to a single family home. They already have two littles and a third on the way. They are wanting more space and a better neighbourhood to raise their children in.


They wrote an offer on a lovely home before they looked into their mortgage options. They came to me with an accepted offer and are madly in love with the home they wrote the offer on. They are willing to move heaven and earth to make it happen. The challenge is that they have not had an offer on their condo yet. They both make great income and have investments that will cover the necessary down payment. The trick is that if they have haven’t sold and have to move forward with their purchase they will have to use a private lender to make it happen because their ratios are too high carrying both properties.


Two years ago I might not have been so concerned but with the market being a bit slower there is

significant risk that their condo might not sell in the time frame they need it to.


If this happens and they choose to go the private lender route, they are looking at roughly $20,000 in

fees and closing costs and an interest rate of ten per cent. Monthly payments are $4400.00. They will not be able to rent out their condo because of restrictions in their strata. With strata, property taxes, and their mortgage payment they are looking at about $2600.00 per month. If they end up having to carry both of the mortgages for more than a few months they are going to burn through their savings very quickly. They may end up having to drop the price of the condo significantly which means they might take a loss on the condo as their mortgage balance is close to the break even mark after realtor fees.


They are determined to move forward regardless and quite honestly it concerns me. Another family I am working with has taken a different view. Similar situation and they can more than cover both mortgages if they have to. They have done a very thoughtful analysis of their finances and lifestyle and have taken the approach that it will all come together if it is meant to, and that if their current home doesn’t sell they will not put themselves in jeopardy to buy this particular home.


This approach makes me much more comfortable. What is the danger in the first situation? If for some reason they do move forward and their condo doesn’t sell for several months I don’t think they will be able to afford the payments on both homes. If they fall behind they will have no buffer left and could potentially end up in foreclosure. Maybe it doesn’t get that drastic, but the stress of carrying both properties will be overwhelming.


Before you write an offer on a home, I cannot stress how important it is to connect with a mortgage

professional to get your financial ducks in a row. Knowing what you qualify for (and if you qualify for

that matter) and the costs of making a move will help set you up for success.

There is often a way to arrange temporary financing to cover both homes, but the big question is does it make sense to move forward if you are madly in love with the home? Only you can make that decision.

Tracy Head

Mortgage Broker

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I know this is a dumb question but

By Tracy Head • May 19, 2025
I know this is a dumb question but ….  I should probably know this already …. I’m sorry to ask so many questions but …. So many times clients start out with one of these statements. They feel like they should have a better understanding of the mortgage process or terminology. The truth is that buying a home is not a simple journey. Applying for a mortgage is not a cake walk. And even if you’ve been through the process in the past the goal posts seem to move faster than you can keep up. One of the reasons I love (most days) my work is that I am able to spend as much time as I need with my clients helping them understand their financing. When I worked for one of the chartered banks in a previous life I was so tightly scheduled that when our time was up that was it. Someone else had an appointment that I needed to be on time for. Clients have different learning and communication styles. Some come well-versed and understand the mortgage process; others have not done any research and need a lot of hand-holding. My goal is to make sure that by the time they are signing their legal paperwork in front of their lawyer my clients understand the decisions they have made and the rationale behind them. Whether it is the first time you are buying a home or you are looking to refinance your current mortgage it is important that you find a professional to work with that is patient and non-judgmental. In a beautiful world you connect with someone that has bought and sold a few of their own homes and has been working in the mortgage world for a while. It can feel very intimidating to bare your soul to a complete stranger. We often don’t share details of our finances with anyone except our banker / spouse and in some cases I find clients may feel embarrassed about the state of their finances. We see via social media others living lavish lifestyles and somehow feel we should be doing the same. The bottom line is that whether this is your first plunge into the homeownership pool or you are a veteran in the market, it is so important to connect with someone that takes the time to understand your situation and your goals. Knowing your long-term plan and how you handle your finances can help your mortgage professional set you up for success. Please please please make sure you ask all of the questions, even if you think you should know that answers. Guessing that you understand something or bluffing without listening to your mortgage professional’s advice can cause unnecessary grief down the road.

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.