I'm preapproved. Can financing still fall through?

What is the difference between preapproval and money ready to close?

These checks can overlap. They do not always happen in this exact order.

1. Preapproval: an early borrowing assessment, sometimes with a rate hold. Processes vary. Ask what was checked and when it expires. FCAC: preapproval
2. Property review: the lender assesses the specific home as security for the mortgage. It needs to accept the property and its value, even if your income supports the loan. An appraisal may be part of that review. RECA: preapprovals and unconditional offers
3. Mortgage-insurer review, where required: the insurer makes its own assessment. A positive response from the bank does not replace this decision. CMHC, for example, assesses the borrower, property, market and overall risk. CMHC: mortgage-insurance assessment
4. Mortgage commitment: the lender sets out the proposed loan and its conditions in writing. A commitment can still have requirements that must be satisfied. Read the conditions and dates, not just the approved amount. FSRA: mortgage application process, step 9
5. Funding and closing: mortgage money must actually be advanced, and the legal closing work completed. Signing mortgage papers is a step in that process. Your lawyer coordinates the closing funds and registration work. RBC: preparing for closing

What if the appraisal is lower than the price I offered?

The amount the lender will lend may no longer cover the purchase as planned. You may need more of your own money. A preapproval for a borrowing amount does not mean every home at that price will be accepted. RECA: property value and financing

Ask your mortgage professional to show the revised loan amount and cash needed. Then discuss your contract options with your lawyer before changing the purchase terms or removing a condition. Do not assume you can borrow the shortfall elsewhere without affecting the mortgage assessment.

Why could the bank say yes but the mortgage insurer say no?

They are making different decisions. The bank assesses whether it will lend. When mortgage default insurance is required, the proposed loan must also qualify for that insurer's coverage. CMHC's assessment includes more than the buyer's income: the property and overall risk matter too. A file can satisfy the bank's initial assessment while an insurer's requirements remain unmet. CMHC: insurance risk assessment

Mortgage default insurance protects the lender if the borrower cannot make payments. It is different from home insurance covering the property. CMHC: what mortgage loan insurance means

Ask which insurer reviewed the file, what issue remains and whether the answer is a decline or a request for more information. Another application is not a guaranteed solution. Your mortgage professional needs to explain the actual options for your file.

Can approval change after I receive a commitment?

Yes. A commitment is based on the information supplied and the conditions in the document. New debt, a change in credit or information that no longer matches the application can affect approval. FSRA: commitment letters and changed information

Changes in employment or income can matter too. Before taking a car loan, changing jobs or making another major financial commitment, ask how it would affect your mortgage. If something has already changed, tell your mortgage professional promptly. RECA: changes before closing

I'm self-employed and the new home finishes later. When should I start?

Start the financing conversation before committing to the purchase. Do not wait until the home is almost ready, and do not treat today's assessment as approval for a distant possession date.

Ask for a plan with three checkpoints:

• Before signing: what can be assessed now, and what remains uncertain?
• During the wait: when do the rate hold and commitment expire, and when should updated business and income records be provided?
• Before possession: when will the lender reassess the file, confirm the property requirements and prepare for funding?

Tell the professional whenever the expected completion date changes. Ask which parts of the assessment will need updating and what could change before funding. These checkpoints are questions to plan around, rather than a lender's timetable.

For the first conversation, use our self-employed preparation guide.

What should I confirm before removing a financing condition?

Ask for written answers to these questions:

• Has the lender accepted this property and any required valuation?
• Is mortgage-insurer approval required, and what is its status?
• Which income, down-payment or other documents are still outstanding?
• What conditions remain in the commitment, who is handling them and by when?
• Does the approval cover the expected closing date?
• What changes must I report before funding?

Have your lawyer explain the financing condition in your purchase agreement, its deadline and the consequences of removing it. Ask how it differs from the lender's outstanding requirements. A preapproval alone is not a reason to decide that financing is secure. RECA: preapprovals and unconditional offers

The lender has backed out and my purchase is already firm. What now?

Contact your mortgage professional and your real estate lawyer immediately. Do not wait for closing day.

Ask your mortgage professional for the written reason, possible solutions, deadline feasibility, and full costs and conditions. FCAC recommends discussing alternatives after refusal. FCAC: if a lender refuses your application

Give your lawyer the purchase agreement, commitment, lender's message and closing date. Ask:

• What obligations and deadlines apply under my agreement?
• What could happen to my deposit, and could there be other financial consequences?
• Is an extension or another agreement possible, and what would it require?
• What should I do or avoid doing while you assess the situation?

This is an urgent, contract-specific situation. The steps above help you get the right people working on it; they do not determine your legal rights or guarantee replacement financing.

Before the closing appointment

Confirm with your lawyer what you need to sign, how much money you must provide, when it must arrive and what proof of property insurance is required. Ask whether anything remains outstanding with the lender. RBC: closing documents and funds

Keep income records, bank statements and identification out of BCG's contact form. Use your mortgage professional's and lawyer's secure document processes.

Once you have discussed your financing plan with your own mortgage professional, tell us the Edmonton areas, home type and timing you are looking for. Start a conversation with BCG.