Accepted offer
From accepted offer to funded mortgage, without losing the deposit.
A pre-approval says a lender likes you. A live-deal approval says a lender likes you and this property. The financing condition is the window in which you find out whether those two things are the same, and it is the most consequential deadline in the whole purchase.
Executive summary
What a financing condition actually is
It is a legal term of your contract, not a mortgage product, and its precise wording and effect depend on the agreement you signed and the law of your province. Read it with your lawyer or notary rather than assuming the standard-form language does what you expect.
In competitive markets buyers are pushed to omit this condition. That is a transfer of risk, not a strategy: without it, a declined mortgage can mean losing the deposit and facing further liability. If you are considering an unconditional offer, at minimum have a fully underwritten pre-approval, a confirmed down payment trail, and a lender who has reviewed the specific property type.
Offer to funding, step by step
Day 0
Offer accepted
Send the full signed agreement, the MLS listing and the deposit details to your broker or lender the same day. The financing clock has already started.
Day 0–2
Live-deal submission
The lender re-underwrites the file against the actual property, refreshes income and credit as needed, and issues a commitment listing the conditions of approval.
Day 1–5
Appraisal
The lender orders an appraisal if the file requires one. Access to the property, and the appraiser's schedule, are common sources of delay.
Insured files often waive a full appraisal in favour of an automated valuation, but this is an insurer and lender decision.
Day 3–7
Conditions satisfied
Outstanding documents are provided and signed off. Chase anything involving a third party — employers, accountants, condo corporations — first.
Financing date
Condition removed in writing
Only after you hold a written commitment and know which conditions remain outstanding at funding.
Closing
Instructions and funding
The lender instructs your lawyer or notary, who confirms title, registers the charge and receives the advance.
Appraisals, value gaps and what a shortfall costs
Lending is against the lower of purchase price and appraised value. If a property appraises below the agreed price, the lender does not reduce the price — it reduces the loan, and the shortfall becomes your cash.
| Purchase price | Appraised value | Maximum loan at 80% | Cash required |
|---|---|---|---|
| $800,000 | $800,000 | $640,000 | $160,000 |
| $800,000 | $780,000 | $624,000 | $176,000 |
| $800,000 | $760,000 | $608,000 | $192,000 |
| $800,000 | $740,000 | $592,000 | $208,000 |
Note the asymmetry: a $60,000 appraisal gap costs $48,000 in additional cash at 80% loan-to-value, because you must fund both the deposit shortfall and the reduced loan. On an insured file the effect is even sharper, because the insurer also values against the lower figure.
Conditions of approval, and which ones bite
| Condition | What satisfies it | Typical time |
|---|---|---|
| Confirmation of income | Recent pay statements, an employment letter, or business financials for self-employed borrowers | 1–5 days, depending on who has to sign it |
| Confirmation of down payment | 90 days of statements per account, plus a gift letter where funds are gifted | Same day if prepared in advance |
| Satisfactory appraisal | Lender-ordered appraisal or an accepted automated valuation | 2–7 days |
| Condo documents | Status certificate, estoppel certificate or the provincial equivalent, plus financial statements | Up to 10 business days — order it immediately |
| Property insurance binder | Confirmation of coverage effective on the closing date | 1–2 days |
| Payout or closure of a specified debt | Statement showing a zero balance and, where required, a closed account | 1–5 days |
| Solicitor or notary instructions completed | Title review, charge registration and identity verification | Handled at closing |
Worked example: a five-day financing condition on a condo
Provincial variation you should plan around
| Where | What differs |
|---|---|
| Ontario | A status certificate is the standard condo disclosure, with a statutory production period; land transfer tax is payable at closing, with an additional municipal tax in Toronto. |
| British Columbia | Strata documents and depreciation reports are reviewed closely; property transfer tax applies, with exemption programs for qualifying purchasers. |
| Alberta | No land transfer tax, but registration and title fees apply; real property reports with municipal compliance are commonly required. |
| Quebec | Closings run through a notary rather than a lawyer, and the welcome tax is billed by the municipality after closing rather than paid at it. |
| Atlantic and Prairie provinces | Deed transfer tax varies by municipality in some provinces and does not exist in others; confirm locally rather than assuming. |
Estimate your own numbers with the closing cost estimator and the land transfer tax calculator.
Failure modes and recovery
| Failure | Recovery action |
|---|---|
| Appraisal comes in low | Cover the gap in cash, renegotiate the price, or rely on the financing condition. A second appraisal is occasionally accepted, but that is a lender decision. |
| Status or estoppel certificate is late | Request a written extension of the financing condition before the deadline — extensions after expiry are a renegotiation, not a formality. |
| Lender declines the property type | Move the file to a lender whose policy covers it. Rural acreage, leasehold, small units, live-work and non-standard construction each have specialist markets. |
| Income changed since pre-approval | Disclose immediately. A re-underwrite inside the condition window is survivable; a discovery days before closing usually is not. |
| Condition removed and the mortgage then falls through | Speak to your lawyer or notary at once. This is why the condition exists, and why removing it on anything less than a written commitment is a mistake. |
Written and reviewed by the Canadian Mortgage Compass Editorial Desk. This page is general information for Canadian readers and is not mortgage, legal, tax, or financial advice, and not an offer of credit. Rules, rates, and lender policies change; confirm your own situation with a licensed mortgage professional in your province. Editorial policy · Corrections