Mortgage Puzzles

Tracy Head • April 8, 2024

I’ve written about mortgage documentation in several columns over the years. This week I had an interesting call with several of my colleagues about trends we are seeing in the mortgage world around paperwork right now.

There are people who think that mortgage brokers are able to cut corners and have an easier time getting a mortgage approved. Ironically, I believe we are held to a higher standard which sometimes translates to frustration for clients as we are doing our due diligence with document collection.

When starting with new clients part of my conversation includes an overview of the documents we will need as well as an explanation of why. This conversation also includes a bit of an apology because I know how challenging this process can sometimes be.

“My bank has never asked for that” is something I hear often. What clients don’t consider is that their bank has a full historical view of their day to day banking as opposed to new lenders who are just being introduced to these clients.

If you were asked to lend someone half a million dollars would you do it on a handshake?

Would you assume they will repay you in a timely manner (as agreed) because they seem like good people?

Likely no to both questions.

That’s one part of the puzzle.

The other piece to the puzzle is the increasing trend of fraud in the mortgage world.

From my perspective, my reputation and livelihood are too important to entertain clients that I suspect are not quite as they appear. I explain I am very particular about gathering documents upfront to make sure we are not going to run into any unexpected or unpleasant surprises.

From time to time we come across documents that are glaringly obvious attempts at fraud. With today’s technology fictitious documents are becoming easier to create and harder to detect.

As brokers we represent both our clients and the lenders we are placing their mortgage with. I discovered fraudulent documents on one of my files recently and cancelled the application and notified the lender.

My (ex) client was very very angry. He didn’t see what the big deal was. He went to a local branch and his mortgage was approved.

Where is the harm?

If part of the fraud includes income documents, will this client actually be able to make his mortgage payments down the road? Because he did have a substantial down payment relative to his income, does he have a sideline that isn’t declared or legal?

I absolutely agree that collecting the required documents for your mortgage can seem frustrating, and you may question why your mortgage person is asking for the weird and wonderful collection of paperwork they are asking for. Or you may question why they are asking for more and more paperwork.

Please understand that these requests are coming from the lender and we are doing our best as the middleman to help ease the process for you. Lenders want to be confident that they are making solid decisions with their approvals and are doing their best to prevent mortgage fraud.

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Tracy Head

Mortgage Broker

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Is this the right time to buy a home?

By Tracy Head • October 4, 2025

Is this the right time to buy a home? Who has your best interests at heart? Buying a home can be either an incredibly exciting experience or a very stressful time. Or it can be a combination of both. Part of the challenge can be committing to the decision to move forward with buying a home. How do you know if you are ready? How do you know if this is the right time to buy? I love working with first-time home buyers. I particularly love when they reach out well ahead of time to do their research and get their ducks in a row. I have been working with one such young lady. She has been watching for the right home to pop up. She fell in love with one of the listings that she viewed and moved forward with an offer. She reached out to her investment advisor to make arrangements to move the funds she needed for her deposit from her investments to her bank account. Oddly he did not reply to her three phone calls nor multiple emails. She was forced to walk into his office to deal with this. When she got there he essentially told her she was foolish for buying a home. She should leave her funds in her investments and continue to save with him. She agonized for a few days and ultimately collapsed her offer. He told her that this house, over the long run, was going to cost her $1,000,000. The purchase price was $650,000. The total of the purchase price plus interest over the long run seemed like an astronomical sum. He persuaded her that she would be better off continuing to rent and that at the end of the same time period she would have over $1,000,000 in her investment account. That’s all well and good in theory. In the meantime she still needs a place to live. And there are no guarantees as to what investments will do over time, nor what property values will do. I did some math to see what this actually looked like long term. We have to make some assumptions that the financial advisor is good at what he does and that her investments will do well over the long term. As a rule real estate appreciates over time and rent increases over time. That being said, here is the math I did. Making some assumptions that the mortgage rate stays the same and your rent never increases: $2400 rent per month x 360 months (30 years) = $864,000 $2833 per month mortgage payment x 360 months = 1,019,880 (monthly payments / I suggest you go bi-weekly to pay off quicker) At the end of 30 years renting you have nothing to show for the $864,000 you’ve paid out. At the end of 30 years paying your mortgage you will have a home free and clear – normally real estate increases in value over time so in theory it will be worth way more than what you’ve paid. If you wait another year to buy $2400 x 12 = $28,800 towards someone else’s mortgage. Here’s the wild card. If you choose to rent and choose to invest in a portfolio instead of buying, even if your portfolio is worth $1,000,000 at the end of the same time frame you need to subtract the $864,000 you paid in rent. This leaves you with a net gain of $136,000. If you had purchased a home, your payments of $1,019,880 would be offset by the value of the home you purchased. In this case, assuming no change in value, you now have a home worth $650,000 paid off. The wild card to run these comparisons is how much you need to invest monthly to accumulate the $1,000,000. Either way, you are making this payment on top of your rent payment. Another wild card of course is what property values and investment portfolios do over time. We know rent will continue to increase and mortgage rates will change but I think it warrants looking at this from another perspective. I am not a proponent of aggressive scare tactics so was disappointed in how this advisor handled his conversation with her. Some people are more cautious with their financial plans and I appreciate that. Being certain about your long-term goals will help you navigate the path forward that suits your own situation. Make sure you have trusted people in your corner as you make these big life decisions.

Reverse Mortgage Solutions

By Tracy Head • September 22, 2025

For every problem there’s a solution. Sometimes more than one. It seems like there is an ebb and flow in the types of mortgage products clients choose. Over the last few years I have definitely been fielding more inquiries about reverse mortgages. Although they are becoming more widely accepted, reverse mortgages had a lot of bad publicity. The negative press I’ve seen relates to the American housing market where predatory lenders were taking advantage of vulnerable seniors. Reverse mortgages in Canada are highly regulated so that this does not happen. For some clients it takes a while for them to wrap their heads around reverse mortgages as an (or the best) option for them. Particularly in the Okanagan we see many clients who are house-rich but cash poor. Or at least have limited income to cover their day-to-day living expenses. Sometimes even when the clients recognize that a reverse mortgage is the right plan for them their families or children have objections. When I am working with clients and we are looking at a reverse mortgage as an option I always invite them to include their families / children to our conversations. Often clients are too embarrassed to share with their children exactly how dire their finances are. Sometimes clients can’t get past the stigma of refinancing via a reverse mortgage because all their lives they have worked hard to make sure their mortgage is paid off. Cliché as it sounds, times have changed. The cost of living has risen far quicker than increases to pension income. A friend of mine shared a conversation he had with reverse mortgage clients and their children. The children were vocally opposed to their parents moving forward with a reverse mortgage. Paraphrasing a bit but it went like this: “The way I see it” he said “after completing a thorough review of your parents’ finances, we have three options. Downsizing isn’t an option as they are already in a condo. Number one, they carry on with the current mortgage that they can’t afford. Their expenses come to about $2,000 per month so you can each transfer them $1,000 per month to help cover their payments. Number two, your parents can sell and move in with one or the other of you. Third, we take a closer look at a reverse mortgage to see if that helps them stay in their home without any financial help from you.” Apparently there was a very long pause. After a more thorough conversation about the pros and cons of a reverse mortgage and answering more questions the family did indeed feel a reverse mortgage was the best option for their parents. If you (or your parents) are thinking about a reverse mortgage make sure you take your time and ask all the questions you need to so you are confident moving forward. I have seen reverse mortgages have a profound impact on quality of life for many of my clients. I did not used to be a huge fan of reverse mortgages but have to say I am using them more often to help clients enjoy their retirement years without losing sleep trying to figure out how to cover their expenses.