A first-time homebuyer, Emily, is applying for a mortgage in Ottawa. During the credit check, the mortgage agent discovers a recent, large unsecured loan that Emily did not disclose. When questioned, Emily vaguely states it was for 'personal expenses' and avoids specifics. Which of the following is the most appropriate next step for the mortgage agent regarding this undisclosed debt?

Question: A first-time homebuyer, Emily, is applying for a mortgage in Ottawa. During the credit check, the mortgage agent discovers a recent, large unsecured loan that Emily did not disclose. When questioned, Emily vaguely states it was for 'personal expenses' and avoids specifics. Which of the following is the most appropriate next step for the mortgage agent regarding this undisclosed debt?

Answer options: ✅ Request full details and documentation for the undisclosed loan to properly assess its impact on her debt service ratios and suitability.

• Proceed with the application, as long as the disclosed income still meets the lender's guidelines.
• Ignore the undisclosed loan, assuming the credit bureau report adequately reflects her financial situation.
• Advise Emily to pay off the loan immediately to improve her chances of approval.

Correct answer: Request full details and documentation for the undisclosed loan to properly assess its impact on her debt service ratios and suitability.

Explanation: Mortgage agents must perform due diligence and ensure all financial obligations are transparently disclosed and documented to accurately assess a client's affordability and suitability, as per general conduct and suitability guidelines.