How to use the trees
Each tree is a screening framework, not an automated approval engine.
At every endpoint, return to the complete six-part framework:
1. Borrower
2. Property
3. Transaction
4. Documentation and verification
5. Lender/insurer policy
6. Exit or repayment strategy where applicable
Decision Tree 1 — Residential approval
What is the transaction?
↓ Purchase / renewal / switch / refinance / equity takeout
Is identity, income, credit, down payment/equity and property information complete?
- No → Collect and verify before selecting lender
- Yes → Continue
↓
Does the borrower meet the applicable lender and insurer income, credit and debt-service framework?
- Yes → Test property and transaction
- No → Identify exact policy failure
↓
Is the property acceptable and value supported?
- No → Different property, specialist lender, lower LTV or corrective work
- Yes → Continue
↓
Is the transaction insured, insurable or uninsured?
↓
A-lender policy fit?
- Yes → Conditional approval and fulfilment
- No → Credit union/specialty institutional review
↓
Alternative-lender fit with supportable income and exit?
- Yes → Compare cost and exit with other options
- No → Continue
↓
Private lending has sufficient equity, repayment capacity and credible exit?
- Yes → Suitability, disclosure, legal review and exit milestones
- No → Reduce transaction, delay, sell or pursue non-mortgage solution
Decision Tree 2 — Self-employed borrower
Business form?
↓ Sole proprietor / partnership / corporation / professional corporation
Two-year tax income supports request?
- Yes → Standard institutional analysis
- No → Continue
↓
Are deductions, dividends, salary and corporate NIAT supportable under a named lender policy?
- Yes → Institutional specialty/self-employed program
- No → Continue
↓
Do bank statements and business reasonability support stated income?
- Yes → Alternative program; calculate fee and exit
- No → Continue
↓
Is the weakness temporary and equity sufficient for private financing?
- Yes → Private bridge with dated documentation plan
- No → Reduce loan, improve records, wait or sell
Decision Tree 3 — New Canadian
Legal status and purchase-law eligibility confirmed?
- No → Immigration/legal review before financing
- Yes → Continue
↓
Canadian income and credit sufficient?
- Yes → Standard or insured newcomer pathway
- No → Continue
↓
International credit, foreign assets and continuing income verifiable?
- Yes → Named newcomer/foreign-income/net-worth program
- No → Continue
↓
Professional projected-income program genuinely applies?
- Yes → Named-lender review
- No → Continue
↓
Temporary documentation gap with strong equity and clear Canadian-history exit?
- Yes → Alternative/private bridge
- No → Delay or reduce transaction
Decision Tree 4 — Private mortgage
Why is institutional financing unavailable?
↓ Income / credit / property / timing / arrears / legal / construction
Is the problem temporary and identifiable?
- No → Private mortgage may postpone rather than solve problem
- Yes → Continue
↓
Accepted value and total LTV support requested net funds?
- No → Reduce request, add security or consider sale
- Yes → Continue
↓
Can borrower carry interest, taxes, insurance and property costs?
- No → Structure is unsuitable without another verified repayment source
- Yes → Continue
↓
Primary exit independently testable?
- No → Do not rely on hope or appreciation
- Yes → Continue
↓
Contingency exit and trigger date?
- No → Build one before closing
- Yes → Compare all-in cost, term and consequences
Decision Tree 5 — Commercial approval
Property and purpose classified?
↓ Owner occupied / investment / mixed use / multi-unit / construction / bridge
Historical and stabilized NOI established?
- No → Obtain rent roll, leases and statements
- Yes → Continue
↓
DCR supports requested debt?
- No → Lower loan, more equity, improve NOI or use transitional structure
- Yes → Continue
↓
Appraisal and LTV support request?
- No → Lower loan or reassess value assumptions
- Yes → Continue
↓
Sponsor experience, liquidity and guarantees acceptable?
- No → Add equity, management or support
- Yes → Continue
↓
Environmental, title, zoning and lease risk acceptable?
- No → Cure, insure, remediate or decline
- Yes → Credit approval, legal due diligence and covenants
Decision Tree 6 — Construction financing
Land controlled and title acceptable?
↓
Approved plans, permits and complete budget?
- No → Not ready for construction underwriting
- Yes → Continue
↓
Borrower equity invested and contingency adequate?
- No → Increase equity or reduce scope
- Yes → Continue
↓
Builder/owner-builder has experience and capacity?
- No → Qualified builder/project manager or higher-risk lender
- Yes → Continue
↓
As-completed value and takeout support project?
- No → Redesign capital stack or project
- Yes → Continue
↓
Draw control, inspections, holdbacks and cost-overrun protocol established?
- No → Complete controls
- Yes → Construction approval and monitored advances
Decision Tree 7 — Mortgage default
Missed payment, demand or formal notice?
↓
Ontario lawyer has confirmed legal stage and deadline?
- No → Immediate legal review
- Yes → Continue
↓
Can arrears be cured and existing mortgage reinstated?
- Yes → Compare cure funding with full payout
- No → Continue
↓
Institutional refinance available within deadline?
- Yes → Fulfil urgently
- No → Continue
↓
Private bridge has sufficient equity and credible exit?
- Yes → Compare with voluntary sale
- No → Voluntary sale/legal strategy
Decision Tree 8 — Estate and death
Who died: owner, borrower, guarantor or combination?
↓
How is title held?
↓ Joint tenancy / tenancy in common / sole / trust / corporation
Who has legal authority?
- Surviving owner
- Estate trustee
- Attorney authority generally ends at death
↓
Mortgage current and property insured?
- No → Stabilize immediately
- Yes → Continue
↓
Insurance benefit available?
↓
Retain, assume/refinance or sell?
↓
Lender approval and estate legal process
Decision Tree 9 — Divorce and separation
Sell or one spouse retains property?
Sell → Legal authority, listing, payouts and distribution
Retain → Continue
↓
Buyout and support obligations legally documented?
- No → Family-law work first
- Yes → Continue
↓
Remaining spouse qualifies for required mortgage?
- Yes → Refinance/equity-buyout and title transfer
- No → Continue
↓
Temporary qualification gap with credible exit?
- Yes → Compare B/private bridge with sale
- No → Retaining property may be unsustainable
Decision Tree 10 — Commercial refinance
Purpose: rate, maturity, equity, partner buyout, capex or private exit?
↓
Current NOI and rent roll support debt?
- No → Stabilization or lower loan
- Yes → Continue
↓
Appraised value and cap rate support LTV?
- No → More equity or alternative structure
- Yes → Continue
↓
Existing penalties, guarantees and discharge terms known?
- No → Obtain payout/legal review
- Yes → Continue
↓
Environmental and capital needs current?
- No → Complete due diligence
- Yes → Institutional takeout or commercial bridge
Decision Tree 11 — Mixed-use property
Residential and commercial uses under one title
↓
Unit count, floor-area share, value share and income share established?
- No → Appraisal and legal-use review
- Yes → Continue
↓
Residential/CMHC program expressly fits?
- Yes → Apply under named program
- No → Continue
↓
Commercial/alternative lender accepts use, tenant and location?
- Yes → Commercial or alternative underwriting
- No → Private transitional financing only with corrective exit
Decision Tree 12 — Agricultural or rural property
Primary use: residence, hobby farm or working farm?
↓
Well, septic, access, acreage and zoning acceptable?
- No → Inspection, legal or specialist review
- Yes → Continue
↓
Residential lender accepts whole value?
- Yes → Residential underwriting
- No → Continue
↓
Farm income and agricultural assets support farm financing?
- Yes → Agricultural lender/program
- No → Larger equity, specialist lender or reduced transaction
Decision-quality checklist
- [ ] Exact policy failure is identified.
- [ ] Lender category is selected after borrower and property analysis.
- [ ] Cheapest payment is not confused with lowest total cost.
- [ ] Eligibility is separated from suitability.
- [ ] Approval is separated from fundability.
- [ ] Every short-term solution has a dated exit.
- [ ] Legal, tax and accounting issues are escalated.
- [ ] Contingency is documented before commitment acceptance.
---
Source Notes for Chapters 53–57
[^FSRA-APP]: Financial Services Regulatory Authority of Ontario, Mortgage Application Process, accessed July 23, 2026.
[^FSRA-WORKING]: Financial Services Regulatory Authority of Ontario, Working with a Mortgage Professional, accessed July 23, 2026.
[^FINTRAC-MORTGAGE]: FINTRAC, Mortgage administrators, brokers and lenders — requirements, effective October 11, 2024, accessed July 23, 2026.
[^CRA-T2125]: Canada Revenue Agency, T2125 Statement of Business or Professional Activities, page dated May 1, 2026.
[^CMHC-SE]: Canada Mortgage and Housing Corporation, Self-Employed Mortgage Loan Insurance, accessed July 23, 2026.
[^CMHC-RENTAL]: Canada Mortgage and Housing Corporation, Income Property, accessed July 23, 2026.
[^FCAC-RENEWAL]: Financial Consumer Agency of Canada, Renewing your mortgage, current page accessed July 23, 2026.
[^OSFI-MQR]: Office of the Superintendent of Financial Institutions, Minimum qualifying rate for uninsured mortgages, modified January 29, 2026.
[^ONT-CONSTRUCTION]: Ontario, Construction Act, current consolidation accessed July 23, 2026; section 22 basic holdback and 2026 amendments.
---