Mortgage Pre-Approval

A pre-qualification is an informal estimate of what you might afford based on self-reported information. A pre-approval is a formal process where a lender reviews your verified income, credit, and assets, then issues a written commitment for a specific mortgage amount and rate. Pre-approvals carry significantly more weight with sellers and real estate agents because the lender has already vetted your financial profile.

A pre-approval is a conditional commitment, not a final guarantee. It confirms that you qualify based on your current financial situation, but the final approval depends on the specific property you choose. The lender will need to verify that the property meets their requirements through an appraisal and ensure nothing has changed in your financial circumstances between pre-approval and closing.

Yes, a pre-approval requires a hard credit inquiry which may temporarily lower your score by a few points. However, credit bureaus in Canada recognize that mortgage shopping involves multiple inquiries. Multiple mortgage-related credit pulls within a 14 to 45 day window are typically treated as a single inquiry for scoring purposes. The minor impact is far outweighed by the benefits of knowing your budget and locking in a rate.

Most pre-approvals include a rate hold that lasts between 90 and 120 days, depending on the lender. During this period, your rate is protected even if market rates increase. If your pre-approval expires before you find a property, we can renew it, though the rate may change to reflect current market conditions. We recommend starting the pre-approval process as soon as you begin thinking about buying.

Yes. Self-employed borrowers can absolutely get pre-approved. The documentation requirements differ slightly. Instead of T4 slips and pay stubs, you will typically need two years of personal and business tax returns (T1 Generals), your Notice of Assessment, and potentially business financial statements. Some lenders also offer stated income programs for self-employed borrowers with strong credit and at least two years of business history.

If the property you want exceeds your pre-approved amount, we have several options. You can increase your down payment to reduce the mortgage needed, a co-signer can be added to strengthen the application, or we can explore alternative lenders with different qualification criteria. In some cases, the lender may approve a higher amount if the property appraises well and your debt ratios remain within acceptable limits.