Short answer
The lender must know the true purchase price, incentives, credits and obligations. Undisclosed cashback, renovation credits, deposit returns or separate agreements can distort the property value and down payment.
The client problem
The signed purchase agreement shows one price, while the seller promises to return money after closing. The lender and appraiser assess a transaction that is not the real bargain.
A practical Ontario example
A $25,000 post-closing rebate effectively changes the economics of the sale. Send every schedule, amendment and incentive to the broker, appraiser and lawyer for lender review.
Legitimate routes may still exist
A truthful file may be assessed through standard A lending, alternative/B lending, or an MIC/private solution depending on income, credit, equity, property and timing. No lender route makes false information acceptable.
Policy boundary: FSRA regulates mortgage-brokering conduct in Ontario; lenders still set their own underwriting policies. Fraud-prevention duties do not authorize altering or hiding application facts.
Questions to ask now
- Is money returning to the buyer?
- Are upgrades or credits included?
- Does the appraisal know?
- Has the lender approved all amendments?
Rajiv’s practical view
A legitimate builder or seller incentive may be acceptable under a lender’s policy. Hiding it turns a possible structure into a serious risk.
Source and context
General Ontario education. Results depend on the contract, lender, administrator, property, equity, documents and legal advice. No approval or legal outcome is promised.
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Mortgage declined? Start here · Closing-problem guidance · Mortgage Knowledge Centre
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Rajiv Verma, Mortgage Broker · Ontario