Mortgages on Fire

Tracy Head • June 15, 2023

I sat down to write my column and there were two themes from the last few weeks that jumped out at

me. Mortgages on fire is a bit tongue in cheek. The two things that have been a theme in my conversations lately are how the fires throughout the province are affecting both the housing market and the purchase process, and how pre-build purchase files are feeling a bit like we need a whole team of firefighters to bring them across the finish line.


Purchasing a pre-build unit can be both lucrative and very stressful. When I say pre-build, I refer to

buying a home from a developer that has not yet been built. You choose your floor plan and color scheme, make a deposit to the developer, and wait for the project to be built.


I have seen pre-builds with completion dates ranging as far out as three years down the road. The

lucrative part I referred to is that (as a general rule) real estate increases in value over time. If you buy a unit now, it may be worth considerably more by the time the project is finished and you take

possession.


In the olden days (say two or three years ago) the time to completion wasn’t a big issue. Interest rates

were lower and people qualified for more borrowing power than they do today. Some people invest in a pre-build intending to sell it closer to the time the project is complete. What they are doing is selling their contract to a new purchaser. This is called assigning the contract, or if you are the purchaser you are buying an assignment of the original contract for a higher price than the original purchase paid based on current market value of the home.


Over the last few months I’ve seen clients in tough spots as their home is nearing completion and they

no longer qualify for financing with traditional lenders. After years of dreaming about their new home clients are suddenly facing much higher payments than they planned for when they initially signed their purchase agreement. In some cases they have had to come up with additional down payment in order to complete their purchase.


On the other end of the spectrum I’ve worked with several clients who have faced delay after delay of

the completion of their new build. During the height of the pandemic this was attributed to supply chain issues and challenges finding trades to actually do the build. Over the last few months I’ve seen stories on the news and seen a few cases of developers who are facing financial challenges, which then drags out the completion date even further.


If you are considering purchasing a pre-build, I cannot stress enough the importance of doing your due diligence. Research the developer. Does the developer have a strong reputation for building quality homes and completing them on time?


More importantly, do your homework with respect to your financing. Don’t purchase something at the

top of what you qualify for anticipating that everything will be status quo two or three years from now.

Shop at a lower purchase price and save as much for your down payment as possible between now and closing.


If you are buying a pre-build, please make sure you have your ducks in a row and have a backup plan for your financing … just in case.


Back to the other part of mortgages on fire. With such an early start to the fire season this year, I expect we are in for a challenging summer.


If you are purchasing a home, one of the conditions you have to satisfy for your lender is that your home is insurable and that you have adequate insurance in place.


If a fire flares up close to the home you are purchasing, you may have a difficult if not impossible time

trying to coordinate home insurance. As a rule, insurers require that the home you are buying is a

certain radius or distance from an active fire in order to provide an insurance policy.


In order to protect home buyers that are not able to finalize their home purchase due to an active fire,

realtors ensure that there is a force majeure clause in the purchase contract.


According to google, force majeure is a contractual clause intended to protect the parties from events

outside normal business risk. The clause may be used to manage the risk of unforeseeable future events that could impact a party's ability to complete its contractual obligations.


I’m dealing with this right now with clients that are buying in Chetwynd (not far from Tumbler Ridge).

The first thing I checked was that their contract included the force majeure clause.


Regardless of the time of year you are purchasing this clause is one you should look for in your purchase agreement.


As a reminder, if you haven’t already claimed your Home Owner’s Grant, take a moment to do that. It

takes less than five minutes to complete the online form.

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.