Mortgage Pre-Approval: What You Need to Know
If buying a home is somewhere on your radar, getting pre-approved for a mortgage is one of the best places to start.
And no—you don’t need to have everything perfectly figured out first.
A mortgage pre-approval is really about understanding your numbers before you start seriously shopping. It can give you a clearer idea of what you may be able to afford, what your monthly payments could look like, and what you’ll need when you’re ready to make an offer.
Here’s what you can expect.
What is a mortgage pre-approval?
A mortgage pre-approval is an early look at your financial picture to determine approximately how much mortgage you may qualify for.
Your mortgage broker will typically look at things like your:
Income
Down payment
Current debts and monthly obligations
Credit
Employment
Estimated property taxes and housing costs
From there, we can work backwards to determine a comfortable purchase price and mortgage amount.
And I say comfortable intentionally.
The maximum amount you qualify for and the amount you actually want to spend every month don't necessarily have to be the same number. Part of my job is helping you understand both.
When should I get pre-approved?
Ideally, before you fall in love with a house.
You don't need to wait until you're ready to write an offer. In fact, getting started earlier can give you time to make adjustments if needed.
Maybe you need to save a little more toward your down payment. Maybe paying off a certain debt could improve your qualification. Or maybe you're in a better position than you thought.
Either way, knowing ahead of time makes the home-buying process a whole lot less stressful.
What do I need for a mortgage pre-approval?
The exact documents will depend on your situation, but you may be asked for things like:
Recent pay stubs
Employment information
T4s and/or Notices of Assessment
Information about your down payment
Details about existing debts or properties
Identification
If you're self-employed, earn commission or have another type of non-traditional income, there may be a few additional documents needed.
Don't worry about figuring out exactly what applies to you before reaching out. That's what I'm here for.
Does a pre-approval include a rate hold?
It can.
Depending on the lender and mortgage product, we may be able to secure a rate hold for a set period of time while you shop.
This can give you some protection if rates increase before you find your home. If rates improve while you're shopping, we can also review the options available to you at that time.
A rate hold isn't always the most important part of a pre-approval, though. The bigger goal is making sure you understand your qualification and are financially prepared to buy.
Does a pre-approval guarantee my mortgage will be approved?
This is an important one: no.
A pre-approval is a great starting point, but it isn't a final mortgage approval.
Once you have an accepted offer, the lender will still need to review the actual property along with your updated application and documentation. Things like the property's value, condition, location and type can all factor into the final approval.
Your finances also need to remain relatively consistent between your pre-approval and your purchase.
That means this probably isn't the ideal time to finance a new vehicle, open a bunch of new credit cards or make another major financial change without checking in first.
If you're unsure whether something could affect your mortgage approval, ask me before you do it. I'd much rather have the conversation ahead of time!
What happens when I find a home?
This is where all that preparation starts to pay off.
Once you have a property in mind, we'll update the numbers using the actual purchase price, property taxes, down payment and other details.
Then we'll look at the mortgage options available and determine which lender and product make the most sense for you.
And remember: the lowest rate isn't always automatically the best mortgage.
We'll also consider things like prepayment options, penalties, portability, restrictions and your plans for the next few years.
The goal isn't just to get you a mortgage.
It's to help you understand the mortgage you're choosing.
Not ready to buy quite yet? That's okay.
You don't have to be buying next week—or even next month—to start the conversation.
If homeownership is something you're considering, getting a sense of your numbers now can help you figure out what needs to happen between “maybe someday” and “we're ready to start looking.”
No pressure. No expectation that you already know how all of this works.
That's my job.
Thinking about buying a home in BC? Let's figure out what your numbers could look like and build a plan from there.
