The Price of a Lie: Why Honesty is Crucial in the Mortgage Process

The Price of a Lie: Why Honesty is Crucial in the Mortgage Process

Anytime you lie, and get caught, the first instinct might be to cover it up with more lies. But let me tell you, that’s when things start to spiral out of control.

Let me share a recent event where a lie caused more trouble than it was worth.

A deal came across my desk from one of the top Realtors in Calgary. At first glance, it seemed like any other: a straightforward referral, a motivated client, and a promising property search ahead. We began the pre-approval process, gathering all the necessary documents with one exception. The client assured me that this missing piece—a down payment proof—wasn't an issue. He claimed it was tied up in an investment and couldn’t be printed right away. He pushed me to condition the pre-approval on receiving this document later.

I don’t usually work that way. I believe in doing things right from the start—no exceptions. I don’t want to waste anyone’s time, including the Realtor’s, the client’s, or my own. But the client insisted, so I bent a little, conditioning the pre-approval on further verification of this “guaranteed” down payment. With the pre-approval in hand, the house hunting began. Months later, they found a place that matched the approval limit.

Tip of Wisdom #1:
Before you even start the home-buying process, have a realistic expectation of your budget and the market. Don’t waste time looking at million-dollar properties if your budget is half that.

Now, where’s the drama and the lie that derailed everything? Let’s fast forward.

The property was found, an offer was made, and the deal was approved with standard conditions. But as soon as we reached the stage of verifying those conditions, the story started changing—again and again. The down payment narrative shifted from personal savings to a gift, then to a gift from out of the country, and eventually to a complex web of transactions involving brothers, sisters, cousins, and parents. Over 10 different transactions had occurred, most within the last 30 days, making it difficult to trace the money’s origin. The funds had moved around so much that it raised every red flag imaginable.

Tip of Wisdom #2:
When the time comes to waive the financing condition, and you don’t have a written thumbs-up from your Mortgage Advisor confirming all conditions have been met—DON’T WAIVE. Back out, get your deposit back, and regroup. It’s better to solve the issue now than face rejection later. Maybe find a new property with lower taxes, lower condo fees, or simply wait until the funds have been in your account long enough to avoid raising suspicion.

If you’re sitting with your Realtor, debating whether to waive, walk away, or ask for an extension, a lot might cross your mind. Once you’re invested in a lie to get the deal done, backing down becomes much harder. Pride might push you to move forward, even when common sense tells you to walk away. But if you’d been honest from the start, we could’ve addressed the issues and set up a solid plan without resorting to leaving your family in a tight spot.

Numbers don’t lie.
Sure, I can make them dance, but they don’t lie.

Think of your mortgage advisor as your lawyer—we’re on your side, working to get you the best possible outcome. Would you lie to your lawyer? Of course not. We work for you, and our job is to present you in the best light possible, to secure the perfect mortgage with the best rates and terms tailored to your needs. We navigate this process daily, often beyond full-time hours.

Word to the Wise:
If you’re on EI and working under the table, I’m not here to throw you under the bus. But I will help you find a path that gives you a better chance of owning a home.

Call me, and let’s figure out a plan together.
403-807-8779

By: Michael Richmond

Lead Mortgage Planner