Loan Origination

Learn what loan origination is in Canadian mortgage lending, what steps are involved, and how borrowers complete the approval and funding process.

Loan Origination

May 30, 2025


What is Loan Origination?

Loan origination is the full process of creating, reviewing, and approving a new mortgage or loan, from initial application to final funding.

Why Does Loan Origination Matter in Real Estate?

In Canadian real estate, loan origination involves multiple steps and stakeholders, including the borrower, broker, lender, and underwriter.



Steps in loan origination include:



Origination may involve fees, especially in private or complex lending scenarios. These fees should be disclosed up front in writing.



Understanding loan origination helps borrowers navigate the mortgage process and prepare documentation efficiently to avoid delays.

Example of Loan Origination in Action

The borrower completes the loan origination process, including credit review and appraisal, and receives funding two days before closing.

Key Takeaways

  • Covers full mortgage processing from start to finish.
  • Includes documentation, underwriting, and funding.
  • May involve fees and third-party services.
  • Critical to securing home financing.
  • Must comply with regulatory timelines.

Related Terms

  • Mortgage Application
  • Underwriting
  • Lender Disclosure
  • Broker Disclosure
  • Origination Fee

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Non-Recourse Loan

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

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