Short answer
A lender normally requires acceptable property insurance for closing. Older wiring, prior claims, oil heating, vacancy, certain renovations or unusual property use can make coverage more expensive, restricted or unavailable.
Why buyers get caught here
Most buyers first notice the kitchen, room sizes and price. The difficult questions sit behind the listing: what is legally permitted, what belongs to the property, what must be repaired and whether a lender or insurer will accept it.
A rushed offer can make an unverified assumption the buyer’s financial responsibility. The right question is not whether the issue sounds manageable. Ask what evidence exists, who must interpret it and what happens if the answer is unfavourable.
A practical Ontario example
Illustration only: A buyer assumes insurance will be routine. The insurer asks for an electrical inspection because the home has older wiring. The financing deadline arrives before the insurer confirms coverage, so the buyer cannot treat insurance as an after-closing detail.
The example is not a prediction or approval. Property records, municipal rules, insurer criteria, lender policy and professional opinions can produce a different answer for the next address.
Rajiv’s working rule
Obtain an insurance indication for the actual property and intended occupancy early enough to resolve questions before conditions expire.
Start the investigation while the buyer still has contractual options. A lower price does not automatically compensate for a defect, prohibited use or financing problem that the buyer cannot afford to correct.
Questions to ask before waiving conditions
- What fact are we relying on, and where is the supporting record?
- Who is qualified to interpret that record?
- Does the intended use comply with law, insurance and lender requirements?
- What will investigation, repair or correction cost?
- Can the buyer still close if the preferred answer or financing is unavailable?
What the Realtor can help with
The Realtor can obtain available listing documents, ask questions, identify comparable properties, discuss offer protection and negotiate under the buyer’s instructions. The Realtor should not guarantee a permit, legal right, building condition, insurance result or mortgage approval.
What the lawyer should review
The lawyer reviews the agreement, title and transaction-specific legal concerns. Ask about registered interests, clauses, searches, closing adjustments, intended possession and the consequence of an unresolved issue. Legal review should occur before a deadline when the answer could change the purchase decision.
What an inspector or specialist can establish
A general inspection may identify visible concerns but may not answer structural, environmental, electrical, septic, well, zoning or legal questions. Ask what is outside the inspection’s scope and bring in the right specialist where the risk warrants it.
How the mortgage can be affected
A lender decides whether the borrower and property fit its policy. Value, marketability, condition, legal use, occupancy, services and insurance can affect approval. Rajiv can compare A, alternative, MIC and private options where appropriate, but a more flexible mortgage can carry higher rates, fees, equity requirements or an exit-strategy obligation.
Facts, policy and assumptions
Verified public guidance: FSRA’s consumer overview notes that some lenders require home insurance before closing; the insurer or licensed insurance professional determines available coverage.
Lender policy: each lender decides acceptable property and documentation. Professional opinion: the lawyer, inspector, municipality, insurer or specialist answers within their field. Assumption: anything not supported by a current record or qualified review remains uncertain.
What can change the answer?
Property age, location, use, renovations, records, title, services, condition, insurer response, appraisal and lender choice can change the result. The same issue may be acceptable to one buyer and unworkable for another because their cash reserve and intended use differ.
Pressure-test the purchase
Rajiv would test three outcomes: the issue is harmless, the issue is repairable at a known cost, or the issue prevents the planned use or preferred financing. The third outcome needs a documented alternative before the buyer becomes firm.
If the only solution is an expensive short-term mortgage, add the rate, fees, legal cost and exit deadline to the ownership budget. Walking away can be the strongest financial decision when the risk cannot be measured.
Practical options
- Extend or add an appropriate condition.
- Request records or written representations through the Realtor and lawyer.
- Obtain a specialist inspection, quotation or municipal response.
- Renegotiate where the agreement and seller permit it.
- Change the financing structure after comparing full cost and exit risk.
- Do not proceed when the intended use or closing plan cannot be supported.
Related AskRajiv guidance
Continue with home purchase offer conditions ontario, conditional mortgage approval conditions before closing, request the appropriate professional.
Get a mortgage and property second opinion
Before waiving conditions, send the listing, agreement, intended use, condition deadline and known concern through Rajiv’s direct SimplifyMortgage contact form. Request a Home-Purchase Mortgage Strategy Session so the property question and financing question are reviewed together.
Need an independent professional?
Use Rajiv’s Professional Referral Concierge to request an introduction to an experienced Realtor, real-estate lawyer, home inspector, appraiser, accountant or insurance professional. Rajiv helps identify the type of professional needed; each professional remains independent and the client chooses whether to proceed.
Source and review
Read the primary source. Source checked 2026-09-03. Reviewed by Rajiv Verma, Mortgage Broker on 2026-09-03. Educational information only; not legal, real-estate, inspection, appraisal, municipal, insurance or mortgage approval advice.