The client
A newcomer purchase in Port Alberni was set at $398,000, 10% down, on $7,900/month of documented employment income.
Purchase price
$398,000, Port Alberni
10% down, insured
Newcomer's documented income
$7,900/month
Deposit
Released to seller's lawyer in trust
Before the status condition was confirmed
Other debt
$210/mo car loan
The problem
The lender's mortgage commitment carried two separate conditions before final funding -- confirming the newcomer's immigration-status documents, and confirming the down-payment deposit itself. The commitment's own wording sequenced them: status first, deposit funds to follow.
What happened out of order
- ▸The law firm released the deposit to the seller's lawyer in trust as part of routine closing preparation
- ▸At that point, the lender's status-verification condition had not yet actually come back confirmed
- ▸Nothing about the newcomer's actual status was ever in doubt -- the documents were genuine and complete -- but the two steps had happened in the wrong order relative to what the commitment required
No money was ever at risk and no status document was ever missing. The sequence itself was simply backwards.
The numbers
Once the status condition was actually confirmed in the correct order, the purchase's own math was never in question.
| The insured purchase, once correctly sequenced | Amount |
|---|---|
| Base mortgage (90% of purchase price) | $358,200 |
| CMHC premium (3.10% at 90% LTV) | +$11,104 |
| Total insured mortgage | $369,304 |
| Ratio check at the qualifying rate | Figure |
|---|---|
| Payment at the minimum qualifying rate (6.90%), 25 years | $2,564/mo |
| GDS (payment + $300 tax + $120 heat) ÷ $7,900 income | 37.8% |
| TDS (GDS numerator + $210 car loan) ÷ $7,900 income | 40.4% |
37.8% GDS and 40.4% TDS sit comfortably inside CMHC's 39% and 44% maximums, consistent with the kind of file down payment statistics show clearing easily once documentation is in order. BC's property transfer tax on the purchase came to $5,960, unaffected by the sequencing question entirely.
The solution
A submortgage broker licensed under BC's Mortgage Brokers Act treated the commitment's own condition sequence as binding, not as a checklist that could be completed in whatever order was administratively convenient.
First, caught the sequencing error before the lender's final sign-off, by comparing the commitment's own wording against what had actually happened on the file to that point.
Second, confirmed the status documents directly with the lender within the same week, closing the gap between when the deposit moved and when the condition it was supposed to follow actually cleared.
Third, rebuilt the firm's own file checklist so the status condition is confirmed before any deposit or down-payment funds move, not after, on every newcomer file going forward.
The outcome
The purchase funded insured once the status condition was properly confirmed, at GDS of 37.8% and TDS of 40.4%, both comfortably inside CMHC's maximums.
Both ratios sit well inside CMHC's 39% GDS and 44% TDS maximums; the file was never close to either ceiling once the sequencing was corrected.
What to take from this file
- 01A mortgage commitment's conditions often carry an implied or explicit order, not just a list to complete. Read the sequence, not just the checklist of items.
- 02Releasing a deposit ahead of a status condition is a sequencing risk, even when the status itself turns out to be entirely in order. The risk is in the order, not necessarily the outcome.
- 03Catch a sequencing error by comparing what has actually happened against what the commitment requires, not by assuming a checklist item is complete because the file feels far along.
- 04Build a firm-wide checklist that sequences status confirmation ahead of any deposit or down-payment movement on every newcomer file. One caught error is a reason to fix the process, not just the file.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸CMHC — Purchase (Mortgage Loan Insurance) — default-insurance premium schedule by LTV band (25-year amortization).
- ▸CMHC — CMHC Home Start — minimum down payment tiers (5%/10%) and the $1.5M insured price cap.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
- ▸Property Transfer Tax Act, RSBC 1996, c. 378, ss. 3(1) and 3.01(4) — BC's property transfer tax: 1% / 2% / 3% marginal brackets.
Illustrative in this file — lender-specific, not rules:
- ▸4.90% contract rate — rates move daily; not a quote.
- ▸the lender's own sequencing of the status and deposit conditions — each lender sets its own process for confirming status documents; this reflects one file's own sequencing error, not a universal practice.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.