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.

Tracy Head

Mortgage Broker

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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.

So Your Mortgage Is Approved

By Tracy Head • March 6, 2026
So Your Mortgage Is Approved… Now Don’t Break It By the time a buyer gets the call that their mortgage has been approved, the reaction is usually somewhere between relief and a sudden urge to celebrate like they’ve just won the Stanley Cup. After weeks of paperwork, bank statements, document requests, and answering questions about that mysterious $73 e-transfer from your cousin, you’ve made it to the home stretch. But here’s the thing many buyers don’t realize: a mortgage approval isn’t the finish line. It’s more like the last lap before the ribbon. And in this final stretch, there are a few things that can still trip you up if you’re not careful. As a mortgage broker who has watched this happen more times than I care to admit, allow me to offer a friendly list of things you absolutely should not do between mortgage approval and possession day. 1. Do Not Finance a New Car (Even If It Smells Amazing) You might think, “What better way to celebrate a new house than with a new truck in the driveway?” The lender disagrees. Taking on new debt before your mortgage funds can change your debt ratios, which were carefully calculated to get you approved in the first place. I once had a client proudly tell me about the brand-new SUV they bought the week before closing. Unfortunately, the lender was less impressed. Celebrate later. The house comes first. The new car can wait. 2. Do Not Quit Your Job to ‘Follow Your Passion’ I’m a big supporter of people chasing their dreams. But if your dream involves leaving your stable salaried position to start a kombucha brewing company three days before your mortgage funds… perhaps give that dream a couple more weeks. Lenders like stability. A sudden career change can send underwriting departments into mild panic mode. 3. Do Not Open New Credit Cards for Furniture, Appliances, or “Just in Case” It’s very tempting. You walk into a furniture store, see the perfect sectional, and suddenly there’s a cheerful salesperson offering “12 months no payments!” It sounds harmless, but that new credit line can affect your credit score and your debt calculations. Also, you may be shocked to learn this: the house will still accept furniture purchases after you own it. 4. Do Not Move Money Around Like You’re Running an Offshore Hedge Fund During the mortgage process, lenders carefully verify where your down payment and funds are coming from. If large, unexplained deposits suddenly start bouncing between accounts, it can raise questions. Questions lead to paperwork. Paperwork leads to stress. Stress leads to calling your mortgage broker at 9:45 p.m. Keep things simple and predictable until the deal is done. 5. Do Not Co-Sign a Loan for Someone Else You may be the generous type. A friend or family member might ask you to co-sign for a car or a line of credit. As noble as that is, lenders will treat that new obligation as your debt too. Even if your cousin promises they’ll “definitely make the payments.” Your lender prefers promises backed by math. 6. Do Not Miss Any Bill Payments Your credit report was likely pulled during the approval process, and lenders sometimes check again before funding the mortgage. A missed payment can ding your credit score at the worst possible moment. In other words, now is the time to be the most financially responsible version of yourself. The Bottom Line Once your mortgage is approved, the best strategy is surprisingly simple: keep everything exactly the same until your home officially closes. Same job. Same credit habits. Same bank accounts. Think of it like carrying a tray of drinks across a crowded room. You’re almost there—now is not the time to start dancing. The good news? Once the keys are in your hand and the deal is finalized, you’re free to celebrate however you like. Buy the couch. Paint the walls. Host the housewarming party.  Just maybe hold off on the kombucha startup for a week or two.