The Importance of a Pre-Approval

Tracy Head • June 2, 2023

The subject of mortgage pre-approvals has been beaten to death, but I am going to circle back to this

from a different perspective.


Over the last few months I’ve run into several situations where clients have reached out with an

accepted offer in hand but have not done their homework with respect to arranging their financing.

Sometimes this is not an issue, but sometimes it is. For everyone involved in a real estate transaction there is a fair bit at stake.


For your realtor, there are countless hours spent preparing and taking you to listed properties. This can involve hours and hours, sometimes over many months, of research, coordination, and travel. When you do find a property that you want to write an offer on your realtor spends a great deal of time preparing and negotiating your offer.


For the listing realtor, there is time spent back and forth with their client and the realtor representing

the potential purchasers in addition to the time they have already spent working with the sellers getting ready to list their home.


For both realtors there is much that goes on behind the scenes to make an offer come together.

Once a seller has an accepted offer, their home is tied up while they wait to see if you have your

financing approved. They may already have an offer on another home so are making plans and spending money on inspections and appraisals for their own potential move. They are also likely excited about their upcoming move and are spending time coordinating everything from new schools or daycare to home insurance and utility hookups.


There is you. You have spent hours watching Realtor.ca and scouring listings to find your next home. You have explored potential neighbourhoods and spent days checking out possible homes. You have made arrangements to move and are excited about the home you’ve found. Then there is your mortgage person. I love what I do, and feel a great deal of satisfaction when I can find a lender for a complicated situation.


Complicated situations take hours and hours of time and research to find suitable (and palatable)

solutions.


Each application and client is slightly different, and lenders have adapted to offer a wide range of

mortgage products to suit most situations.


However, sometimes just because we are able to find a mortgage approval for you does not make it

wise to move forward with a purchase.


Lenders have different criteria and programs. Most are looking for a few basics to be in place:

  • Are you working consistently?
  • Have you paid your previous credit facilities on time and as agreed?
  • Do you have a down payment organized?


Now, mortgage options can change based on the answers to these questions.


There are a few other things that are important:

  • Have you been bankrupt in the past? Are you discharged from your bankruptcy?
  • Do you have any spousal or child support payments?
  • If your income is casual or commission-based, do you have a two-year history?


If you have not done your pre-work and its been a while since you last applied for a mortgage you may be shocked to learn that you don’t qualify for as much as you used to. You might be horrified to know that even with twenty per cent down the only option we can find is a private lender. You may not be able to wrap your head around the fact that your financing team cannot find a suitable option because of a written-off fine that you thought was not big deal.


It is heartbreaking to learn that you don’t qualify for the mortgage you need. I cannot stress enough the importance of doing your homework to have your financing lined up before you start shopping. I also cannot stress enough the importance of full disclosure with your mortgage person. Sharing any of the skeletons in your closet can help us get ahead of any problems they may cause.


I really take it to heart when I can’t find a suitable option for good people. I want to set my clients up for long-term success and make sure I am not setting them up for disaster or disappointment.

I do love spending as much time as needed educating my clients and helping them prepare so that when they are ready to move forward we find a great mortgage product for them. On a different note – if you are a home owner you should have your 2023 tax bill by now. Make sure you read the form and claim your Home Owners Grant.


If this is your first year in your home and your lender is collecting your property taxes for you, check the upper right corner of your tax notice to make sure it shows your lender. If not, reach out to your

mortgage lender (or broker if you worked with one) to make sure the lender is paying your property

taxes as agreed. Every once in a while there is a disconnect and it is far easier to sort out ahead of time

as opposed to when you get a notice in August that your property taxes are owing.

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.