A pre-approval is a lender reviewing your income, credit and down payment and telling you what they would lend, subject to a property. It holds a rate for 90 to 120 days while you shop.
90 to 120 daysRate hold
Plus 2%Stress test buffer
The propertyStill has to qualify
When to get pre-approved
- You are starting to look and want a firm budget rather than an estimate.
- Your agent will not show you properties without a pre-approval letter.
- Rates are moving and you want to hold today's rate while you shop.
- You want to know whether to fix something in your credit or income first.
- You are self-employed and need to know which lender tier you fall into before you start.
What a pre-approval does not do
- A pre-approval is not an approval. The lender still assesses the property once you have an accepted offer.
- Deals fall apart on appraisals, condo status certificates and property type, not only on the borrower.
- You are qualified at the stress-test rate, the higher of the benchmark or your contract rate plus two percent. The payment you are approved at is not the payment you make.
- Get the rate hold in writing and note the expiry date.
- Do not change jobs, finance a car or open new credit between pre-approval and closing.
- If credit or income needs work, fix it now. After an offer is accepted there is no time.
Documents to gather
- Government photo ID for each applicant
- Two most recent pay stubs and a letter of employment
- Two years of T4s and Notices of Assessment
- Ninety days of statements showing the down payment funds and where they came from
- Gift letter, if part of the down payment is a gift from an immediate family member
- Statements for any existing loans, leases or lines of credit
How we set your real number
- 01 Talk through the pictureIncome, debts, down payment and timeline. We flag anything that will cause a problem before it does.
- 02 Pull credit onceOne inquiry, used across every lender we approach, rather than a new hit at each bank.
- 03 Get the letter and the rate holdYou receive a pre-approval amount and a held rate, usually for 90 to 120 days.
- 04 Convert to a live approvalOnce you have an accepted offer, the lender assesses the property and issues the commitment.
Want your actual number?
Start the application, or call 647-505-1096 and talk it through first.
Questions buyers ask
- Does a pre-approval guarantee I will get the mortgage?
- No. It confirms the lender is satisfied with you, subject to the property and to nothing changing. The property still has to appraise and satisfy the lender's requirements.
- Will a pre-approval hurt my credit score?
- One inquiry has a small, short-lived effect. Applying at five banks separately creates five inquiries, which does more damage. This is a large part of why using one broker is cheaper than shopping yourself.
- What can break a pre-approval?
- Changing jobs, taking on a car loan, a large new credit balance, or the down payment source changing. Tell us before you do any of those, not after.
- How much can I actually afford?
- The lender's maximum and a comfortable payment are different numbers. We will show you both, including property tax, condo fees and heat, which lenders include in the calculation.