The First Step in the Home Buying Process
If you're even thinking about buying a home, you should get pre-approved.
A pre-approval can tell you how much you will qualify for, hold an interest rate while you shop, and help avoid pitfalls when it is time to buy.
Buying a home is a big step, and getting pre-approved for a mortgage can help you move forward with confidence. A mortgage pre-approval gives you a clear understanding of your budget, strengthens your negotiating power, and helps you secure a great rate before you start house hunting.
What is a Mortgage Pre-Approval?
A mortgage pre-approval is a process where a lender evaluates your finances to determine how much you can borrow and at what interest rate. This involves reviewing your income, credit score, debts, and assets. Unlike a pre-qualification, which is an estimate, a pre-approval is a more formal step that carries weight with sellers and real estate agents.
Why Get Pre-Approved?
- Know Your Budget – Understand exactly how much home you can afford.
- Lock in an Interest Rate – Some lenders allow you to hold a rate for up to 120 days.
- Increase Your Credibility – Show sellers you’re a serious buyer with financing in place.
- Streamline the Mortgage Process – Move quickly when you find the right home.
What Do You Need to Get Pre-Approved?
Having the right documents ready can make the pre-approval process smooth and efficient. You’ll typically need:
- Government-issued ID
- Proof of income (recent pay stubs, T4 slips, or tax returns)
- Bank statements showing savings and assets
- Details of debts and liabilities
- Consent for a credit check
How Long Does a Pre-Approval Last?
Most mortgage pre-approvals are valid for 90 to 120 days. If your pre-approval expires before you buy a home, you may need to reapply.
Does a Pre-Approval Affect Your Credit Score?
Getting pre-approved usually involves a credit check, which can cause a small, temporary dip in your score. However, multiple mortgage inquiries within a short period are often treated as a single inquiry by credit bureaus.
What’s the Difference Between Pre-Qualification and Pre-Approval?
| Feature | Pre-Qualification | Pre-Approval |
|---|---|---|
| Level of Review | Basic estimate based on self-reported info | Detailed financial assessment |
| Credit Check? | No | Yes |
| Guaranteed Offer? | No | More reliable |
| Value to Sellers? | Minimal | Stronger buying position |
Ready to start your home search with confidence? Our mortgage experts are here to guide you through the pre-approval process.
Schedule a call with one of our mortgage specialists to explore your options.
Other things to know about a mortgage pre-approval:
Pre-approvals are not a guarantee of financing!
This is important to know because sometimes banks and brokers can give you that impression. The truth is, the preapproval process gives you and your broker a rough idea of what you will qualify for, and should identify any barriers to being approved for a mortgage like damaged credit, unverifiable income, or too much debt. A mortgage pre-approval can’t guarantee financing, but it gives you a much better idea if you will be approved.
Pre-approvals, like regular approvals, are subject to certain terms and conditions.
These conditions usually include things like verification of income, verification of down payment, acceptable property type and location (which can’t be determined until you actually make an offer) and of course, honesty on the application.
If you are considering purchasing a home and would like to be pre-approved so you can purchase a home with confidence, or even just to obtain an interest rate guarantee, contact us or apply for a pre-approval today.
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Frequently Asked Questions
A mortgage pre-approval is a process where a lender evaluates your financial situation to determine how much you can borrow and at what interest rate. It involves reviewing your income, credit score, assets, and liabilities.
Most mortgage pre-approvals are valid for 90 to 120 days. If your pre-approval expires before you purchase a home, you may need to reapply.
Yes, a mortgage pre-approval usually requires a credit check, which can cause a small, temporary dip in your score. However, multiple mortgage inquiries within a short period are often treated as a single inquiry by credit bureaus.
To get pre-approved, you'll typically need:
- Government-issued ID
- Proof of income (recent pay stubs, T4 slips, or tax returns)
- Bank statements showing savings and assets
- Details of debts and liabilities
- Consent for a credit check
Yes, but the requirements may be stricter. Lenders typically ask for at least two years of tax returns, financial statements, and proof of consistent income.