The 10 Don’ts of Mortgage Closing
Erik Sepper • February 18, 2020
Okay, so here we are... we have worked together to secure financing for your mortgage. You are getting a great rate, favourable terms that meet your mortgage goals, the lender is satisfied with all the supporting documents, we are broker complete, and the only thing left to do is wait for the day the lawyers advance the funds for the mortgage. Here is a list of things you should NEVER do in the time between your financing complete date (when everything is setup and looks good) and your closing date (the day the lender actually advances funds).
Never make changes to your financial situation without first consulting me. Changes to your financial situation before your mortgage closes could actually cause your mortgage to be declined.
So without delay, here are the 10 Don'ts of Mortgage Closing... inspired by real life situations.
1. Don't quit your job.
This might sound obvious, but if you quit your job we will have to report this change in employment status to the lender. From there you will be required to support your mortgage application with your new employment details. Even if you have taken on a new job that pays twice as much in the same industry, there still might be a probationary period and the lender might not feel comfortable with proceeding. If you are thinking of making changes to your employment status... contact me first, it might be alright to proceed, but then again it might just be best to wait until your mortgage closes! Let's talk it out.
2. Don't do anything that would reduce your income.
Kinda like point one, don't change your status at your existing employer. Getting a raise is fine, but dropping from Full Time to Part Time status is not a good idea. The reduced income will change your debt services ratios on your application and you might not qualify.
3. Don't apply for new credit.
I realize that you are excited to get your new house, especially if this is your first house, however now is not the time to go shopping on credit or take out new credit cards. So if you find yourself at the Brick, shopping for new furniture and they want you to finance your purchase right now... don't. By applying for new credit and taking out new credit, you can jeopardize your mortgage.
4. Don't get rid of existing credit.
Okay, in the same way that it's not a good idea to take on new credit, it's best not to close any existing credit either. The lender has agreed to lend you the money for a mortgage based on your current financial situation and this includes the strength of your credit profile. Mortgage lenders and insurers have a minimum credit profile required to lend you money, if you close active accounts, you could fall into an unacceptable credit situation.
5. Don't co-sign for a loan or mortgage for someone else.
You may have the best intentions in the world, but if you co-sign for any type of debt for someone else, you are 100% responsible for the full payments incurred on that loan. This extra debt is added to your expenses and may throw your ratios out of line.
6. Don't stop paying your bills.
Although this is still good advice for people purchasing homes, it is more often an issue in a refinance situation. If we are just waiting on the proceeds of a refinance in order to consolidate some of your debts, you must continue making your payments as scheduled. If you choose not to make your payments, it will reflect on your credit bureau and it could impact your ability to get your mortgage. Best advice is to continue making all your payments until the refinance has gone through and your balances have been brought to zero.
7. Don't spend your closing costs.
Typically the lender wants to see you with 1.5% saved up to cover closing costs... this money is used to cover the expense of closing your mortgage, like paying your lawyer for their services. So you might think that because you shouldn't take out new credit to buy furniture, you can use this money instead. Bad idea. If you don't pay the lawyer... you aren't getting your house, and the furniture will have to be delivered curbside. And it's cold in Canada. You get the picture. However just in case you don't, I included it below.
8. Don't change your real estate purchase contract.
Often times when you are purchasing a property there will be things that show up after the fact on an inspection and you might want to make changes to the contract. Although not a huge deal, it can make a difference for financing. So if financing is complete, it is best practice to check with me before you go and make any changes to the purchase contract.
9. Don't list your property for sale.
If we have set up a refinance for your property and your goal is to eventually sell it... wait until the funds have been advanced before listing it. Why would a lender want to lend you money on a mortgage when you are clearly going to sell it right away (even if we arranged a short term).
10. Don't accept unsolicited mortgage advice from unlicensed or unqualified individuals.
Although this point is least likely to impact the approval of your mortgage status, it is frustrating when people who don't have the first clue about your unique situation give you unsolicited advice about what you should do with your mortgage, making you second guess yourself. Now, if you have any questions at all, I am more than happy to discuss them with you. I am a mortgage professional and I help clients finance property everyday, I know the unique in's and out's, do's and don'ts of mortgages. Placing a lot of value on unsolicited mortgage advice from a non-licensed person doesn't make a lot of sense and might lead you to make some of the mistakes as listed in the 9 previous points!
So in summary, the only thing you should do while you are waiting for the advance of your mortgage funds is to continue living your life like you have been living it! Keep going to work and paying your bills on time!
Now... what about after your mortgage has funded? You are now free to do whatever you like! Go ahead... quit your job, go to part time status, apply for new credit to buy a couch and 78" TV, close your credit cards, co-sign for a mortgage, sell your place, or soak in as much unsolicited advice as you want! It's up to you! But just make sure your mortgage has funded first. Also it is good to note, if you do quit your job, make sure you have enough cash on hand to continue making your mortgage payments! The funny thing about mortgages is if you don't make your payments, the lender will take your property and sell it to someone else and you will be left on that curbside couch (as pictured above). Obviously, if you have any questions, I would love to answer them for you, feel free to contact me anytime!
How to Start Saving for a Down Payment (Without Overhauling Your Life) Let’s face it—saving money isn’t always easy. Life is expensive, and setting aside extra cash takes discipline and a clear plan. Whether your goal is to buy your first home or make a move to something new, building up a down payment is one of the biggest financial hurdles. The good news? You don’t have to do it alone—and it might be simpler than you think. Step 1: Know Your Numbers Before you can start saving, you need to know where you stand. That means getting clear on two things: how much money you bring in and how much of it is going out. Figure out your monthly income. Use your net (after-tax) income, not your gross. If you’re self-employed or your income fluctuates, take an average over the last few months. Don’t forget to include occasional income like tax returns, bonuses, or government benefits. Track your spending. Go through your last 2–3 months of bank and credit card statements. List out your regular bills (rent, phone, groceries), then your extras (dining out, subscriptions, impulse buys). You might be surprised where your money’s going. This part isn’t always fun—but it’s empowering. You can’t change what you don’t see. Step 2: Create a Plan That Works for You Once you have the full picture, it’s time to make a plan. The basic formula for saving is simple: Spend less than you earn. Save the difference. But in real life, it’s more about small adjustments than major sacrifices. Cut what doesn’t matter. Cancel unused subscriptions or set a dining-out limit. Automate your savings. Set up a separate “down payment” account and auto-transfer money on payday—even if it’s just $50. Find ways to boost your income. Can you pick up a side job, sell unused stuff, or ask for a raise? Consistency matters more than big chunks. Start small and build momentum. Step 3: Think Bigger Than Just Saving A lot of people assume saving for a down payment is the first—and only—step toward buying a home. But there’s more to it. When you apply for a mortgage, lenders look at: Your income Your debt Your credit score Your down payment That means even while you’re saving, you can (and should) be doing things like: Building your credit score Paying down high-interest debt Gathering documents for pre-approval That’s where we come in. Step 4: Get Advice Early Saving up for a home doesn’t have to be a solo mission. In fact, talking to a mortgage professional early in the process can help you avoid missteps and reach your goal faster. We can: Help you calculate how much you actually need to save Offer tips to strengthen your application while you save Explore alternate down payment options (like gifts or programs for first-time buyers) Build a step-by-step plan to get you mortgage-ready Ready to get serious about buying a home? We’d love to help you build a plan that fits your life—and your goals. Reach out anytime for a no-pressure conversation.
Bank of Canada lowers policy rate to 2¼%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario October 29, 2025 The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. With the effects of US trade actions on economic growth and inflation somewhat clearer, the Bank has returned to its usual practice of providing a projection for the global and Canadian economies in this Monetary Policy Report (MPR). Because US trade policy remains unpredictable and uncertainty is still higher than normal, this projection is subject to a wider-than-usual range of risks. While the global economy has been resilient to the historic rise in US tariffs, the impact is becoming more evident. Trade relationships are being reconfigured and ongoing trade tensions are dampening investment in many countries. In the MPR projection, the global economy slows from about 3¼% in 2025 to about 3% in 2026 and 2027. In the United States, economic activity has been strong, supported by the boom in AI investment. At the same time, employment growth has slowed and tariffs have started to push up consumer prices. Growth in the euro area is decelerating due to weaker exports and slowing domestic demand. In China, lower exports to the United States have been offset by higher exports to other countries, but business investment has weakened. Global financial conditions have eased further since July and oil prices have been fairly stable. The Canadian dollar has depreciated slightly against the US dollar. Canada’s economy contracted by 1.6% in the second quarter, reflecting a drop in exports and weak business investment amid heightened uncertainty. Meanwhile, household spending grew at a healthy pace. US trade actions and related uncertainty are having severe effects on targeted sectors including autos, steel, aluminum, and lumber. As a result, GDP growth is expected to be weak in the second half of the year. Growth will get some support from rising consumer and government spending and residential investment, and then pick up gradually as exports and business investment begin to recover. Canada’s labour market remains soft. Employment gains in September followed two months of sizeable losses. Job losses continue to build in trade-sensitive sectors and hiring has been weak across the economy. The unemployment rate remained at 7.1% in September and wage growth has slowed. Slower population growth means fewer new jobs are needed to keep the employment rate steady. The Bank projects GDP will grow by 1.2% in 2025, 1.1% in 2026 and 1.6% in 2027. On a quarterly basis, growth strengthens in 2026 after a weak second half of this year. Excess capacity in the economy is expected to persist and be taken up gradually. CPI inflation was 2.4% in September, slightly higher than the Bank had anticipated. Inflation excluding taxes was 2.9%. The Bank’s preferred measures of core inflation have been sticky around 3%. Expanding the range of indicators to include alternative measures of core inflation and the distribution of price changes among CPI components suggests underlying inflation remains around 2½%. The Bank expects inflationary pressures to ease in the months ahead and CPI inflation to remain near 2% over the projection horizon. With ongoing weakness in the economy and inflation expected to remain close to the 2% target, Governing Council decided to cut the policy rate by 25 basis points. If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. If the outlook changes, we are prepared to respond. Governing Council will be assessing incoming data carefully relative to the Bank’s forecast. The Canadian economy faces a difficult transition. The structural damage caused by the trade conflict reduces the capacity of the economy and adds costs. This limits the role that monetary policy can play to boost demand while maintaining low inflation. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is December 10, 2025. The Bank’s next MPR will be released on January 28, 2026. Read the October 29th, 2025 Monetary Report
What Is a Second Mortgage, Really? (It’s Not What Most People Think) If you’ve heard the term “second mortgage” and assumed it refers to the next mortgage you take out after your first one ends, you’re not alone. It’s a common misconception—but the reality is a bit different. A second mortgage isn’t about the order of mortgages over time. It’s actually about the number of loans secured against a single property —at the same time. So, What Exactly Is a Second Mortgage? When you first buy a home, your mortgage is registered on the property in first position . This simply means your lender has the primary legal claim to your property if you ever sell it or default. A second mortgage is another loan that’s added on top of your existing mortgage. It’s registered in second position , meaning the lender only gets paid out after the first mortgage is settled. If you sell your home, any proceeds go toward paying off the first mortgage first, then the second one, and any remaining equity is yours. It’s important to note: You still keep your original mortgage and keep making payments on it —the second mortgage is an entirely separate agreement layered on top. Why Would Anyone Take Out a Second Mortgage? There are a few good reasons homeowners choose this route: You want to tap into your home equity without refinancing your existing mortgage. Your current mortgage has great terms (like a low interest rate), and breaking it would trigger hefty penalties. You need access to funds quickly , and a second mortgage is faster and more flexible than refinancing. One common use? Debt consolidation . If you’re juggling high-interest credit card or personal loan debt, a second mortgage can help reduce your overall interest costs and improve monthly cash flow. Is a Second Mortgage Right for You? A second mortgage can be a smart solution in the right situation—but it’s not always the best move. It depends on your current mortgage terms, your equity, and your financial goals. If you’re curious about how a second mortgage could work for your situation—or if you’re considering your options to improve cash flow or access equity—let’s talk. I’d be happy to walk you through it and help you explore the right path forward. Reach out anytime—we’ll figure it out together.