Step 1 — Set three figures before you start viewing
Before serious viewings, write down three numbers: the price you’re targeting, the price you will not go past, and the minimum cash that has to remain in your accounts after the transaction.
The third one is the one people forget. What a lender will lend you and what your budget can actually carry are two different numbers. Yours has to leave money in the account after closing.
Step 2 — Split your savings into four pots
Don’t file every dollar under "down payment." Each pot has its own date and its own job, and money that has to pay the notary is no longer there to shrink the mortgage.
| Fund | What it needs to cover | Common mistake |
|---|---|---|
| Down payment | Eligible funds applied to the purchase price | Counting money that is not yet accessible |
| Closing costs | Inspection, legal work, land transfer duty, and adjustments | Taking them from the reserve at the last minute |
| Property expenses | Moving, immediate work, and necessary equipment | Assuming every expense can wait |
| Post-closing reserve | Repairs, income changes, and other surprises | Reaching closing with almost no savings left |
Step 3 — Pull your records and trace every dollar
The lender will want to follow the money. Get these pieces out before you make an offer, not during:
- Recent proof of income (pay stubs, employment letter, notices of assessment, depending on your situation)
- Statements for the accounts holding the down payment, over the period requested
- A list of your debts: cards, lines of credit, car loan, with the balance and the payment
- HBP or FHSA records if you plan to use them
- A gift letter and proof of the transfer, where applicable
Keep your statements from before a large transfer, mark clearly what is a gift and what is your own savings, and plan the date of an HBP or FHSA withdrawal under the rules in force at the time.
Step 4 — Get prequalified before you fall for an address
Your income, debts, credit, and available funds set the frame for the search. Prequalification guides viewings; preapproval has its own scope and conditions. Neither one replaces the lender’s review of the property you end up choosing.
While you’re shopping, don’t move the file without telling me. A car loan, a new credit card, a job change, a transfer of down-payment funds: each one can shift the numbers we started with.
Step 5 — Test the price against what the address really costs
Add property taxes, heating, insurance, condo fees, and likely maintenance on top of the payment. Two homes with the same payment can cost very differently when one needs immediate work.
This is where the real ceiling gets decided. There are three of them, and the lowest one wins:
| Ceiling | What it helps decide | What it does not settle |
|---|---|---|
| Eligible capacity | The room available under the lender’s criteria | A reasonable price for this property |
| Personal ceiling | The payment, reserve, and plans you want to protect | Expenses specific to the building |
| Address ceiling | An offer that fits taxes, fees, and expected work | The lender’s final approval |
A property that needs early work often deserves a lower offer, even though your eligible capacity hasn’t moved.
Step 6 — Make the offer, then let the file close
An accepted offer restarts the whole review. The lender still looks at the purchase agreement, the property, its value, and your current records. The price you offer does not oblige the lender to use the same value.
| Stage | Your decision | Review still required |
|---|---|---|
| Before viewings | Target price and comfortable payment | Accepted income and financing criteria |
| Before the offer | Price, dates, and financing condition | Fit between the application and deadline |
| After acceptance | Whether to proceed under the conditions | Property, value, and final records |
| Before closing | Exact cash transfer | Satisfied conditions and final adjustments |
Talk about the wording and length of the financing condition with the professionals handling the transaction. A short deadline doesn’t make anyone’s review simpler.
Three common buying mistakes
- Aiming for the top of the prequalification. The bank’s number knows nothing about your taxes, your heating, or what you want to keep to live on.
- Counting the down payment and the closing costs as one sum. The notary, the inspection, and land transfer duty come on top of the down payment, and they run into the thousands.
- Moving money without keeping the trail. A last-minute transfer with no explanation slows the review down instead of speeding it up.
When I tell you to lower the offer or walk away
Example: $475,000 or $500,000
A buyer is weighing two properties. The first is $475,000 and needs little work. The second is $500,000, carries higher taxes, and needs $12,000 of work in the first year. We add up the payment, closing costs, each building’s expenses, and what’s left in the account.
The higher price fits inside the estimated capacity, but it leaves almost nothing after closing. So the buyer sets the ceiling from the full budget, not from the bank’s number. The figures are fictional and confirm neither a rate nor an approval.
If the property fits your budget
I take your income, debts, and funds, then test the price you’re targeting against the real costs you’ll carry. Before the offer, I explain what the file can support. After acceptance, I coordinate the information requested and walk you through the conditions to closing.
I’ll also tell you what falls outside the mortgage decision: inspection, legal questions, the property’s condition, tax advice. The lender stays responsible for its review, the valuation, and the final approval.
Frequently asked questions
Does prequalification guarantee financing?
No. It frames the project with the information we have in hand. The lender still reviews your current records, your credit, the property, and its conditions.
Do the HBP or FHSA replace the down payment?
They form part of it without replacing it. They’re ways of using certain eligible funds; the withdrawal, the timing, and the evidence have to meet the rules in force.
Should I use all the capacity I’m offered?
Rarely. The price also has to fit your expenses, your plans, and the reserve you want to keep after closing.