Pre-Approval
A pre-qualification is usually done over the phone and is meant to see if you meet basic financial criteria, based most often on the borrower’s word-of-mouth. A true mortgage pre-approval is when a mortgage broker or bank/lender has collected documentation from you and has conducted a full investigation into your assets, debt, and credit history to determine whether you can qualify for a mortgage, and how much you may be able to qualify for. A mortgage pre-approval typically allows for an interest rate lock, whereby allowing a pre-approved buyer to have up to 120-days to shop for a home while knowing their interest rate is being held, regardless whether rates are rising.
Why is a mortgage pre-approval important in Canada?
In Canada, many of the provinces have highly competitive real estate markets. If you plan to finance a home purchase, getting a mortgage pre-approval completed is extremely important, especially when multiple buyers may be competing for the same property at times.
- Your real estate agent should be given a copy of your pre-approval, so they know your maximum purchasing power and any specific conditions that are required.
- Sellers find buyers with a pre-approval more attractive compared to a pre-qualification, because it means the mortgage broker or bank/lender has done more due diligence to determine whether you are financially qualified for the loan.
- Pre-approvals allow you to lock in an interest rate while you shop for a home.
What documents should I have ready to provide for pre-approval?
Identification
Government issued ID for each borrower – this can be any provinces driver’s license, birth certificate, or a passport.
Proof of Income
- Employees – two most recent pay stubs + last two years T4’s.
- Self-employed – last two years of Personal T1 Generals & Notice of Assessments (NOAs).
- Passive income – last two years of personal T1 Generals & Notice of Assessments (NOAs).
- Retired/pension – Last 3-months bank chequing account statements, showing pension income being deposited + last two years of personal T1 Generals & Notice of Assessments (NOAs).
Down Payment
Depending on where your funds are coming from, the following can apply:
- Bank chequing and/or savings accounts (last 3-months of statements).
- TFSA (last 3-months of statements).
- RRSP (last 3-months of statements).
- Agreement of Sale (if funds are coming from the sale of a home).
- Refinance Commitment (if funds are coming from a refinance of another property you own).
Other
- Mortgage Statement (for all homes that you have mortgages on).
- Property Tax Bill (for all homes that you own).
- Lease Agreements (for any rental properties that you own).
We can help you with your pre-approval!
You just visited a property and decided you want to make an offer right away, but it’s in the evening or on a Saturday afternoon, and most lenders are out of the office. Dave and his team understand that real estate doesn’t take weekends off. We are available to execute a pre-approval when you need us. Our goal is to ensure you win.
How can I begin the pre-approval process?
Utilize our mortgage calculator below and complete our online mortgage application.
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Need assistance with your application? Complete the form and we will begin an application manually for you.