Short answer
The lender may recalculate qualification, change terms or cancel funding. A private loan, family loan, line of credit or second mortgage used for closing must be disclosed when required. Hidden borrowing also creates title-priority and cash-flow problems.
The client problem
The down payment looks acceptable until a new loan or registered second mortgage appears on statements, credit or lawyer instructions.
A practical Ontario example
A buyer borrows $70,000 privately after approval. The first lender had qualified the file without that payment and security. The deal must be resubmitted truthfully, possibly through another program.
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 any closing money repayable?
- Will another charge be registered?
- What monthly payment applies?
- Has the first lender approved the complete structure?
Rajiv’s practical view
If the file needs secondary financing, build it openly. A B lender, MIC or private first-and-second structure may work when the full debt is visible.
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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Rajiv Verma, Mortgage Broker · Ontario