Mortgage Blog

The Dos and Don'ts of Getting a Mortgage Pre-Approval

March 3, 2022 | Posted by: Ronice Harrison

Becoming a homeowner is many Canadian’s dream, and getting a mortgage pre-approval should be the first step on your list to making it a reality.

Getting pre-approved by your mortgage broker is one of the best things you can do to simplify the home buying process and give yourself more confidence in your buying power.

A pre-approval lets you know how much you are able to borrow with minimal risk. However, as with anything to do with mortgages, you'll want to understand the dos and don’ts of the process before you get started.

Whether you’re a first-time home buyer in Ontario, or any other province, we can help. Here are the dos and don’ts of the mortgage pre-approval process.

5 mortgage pre-approval tips (the dos)

The mortgage pre-approval process isn’t rocket science, but it is very important. Read and follow these five tips and you’re likely to get a great deal on your mortgage.

1. Apply for a mortgage pre-approval first

Most Canadians think the first step in the home-buying process is to contact a realtor and start looking at homes. This isn’t correct. The first thing you should do is apply for a mortgage pre-approval. After all, if you find a home you like, you’ll want to move quickly. Being pre-approved for a mortgage removes an extra step in the process.

Being pre-approved also helps you know how much you can afford to spend. You can get a good estimate of how much you can afford with our mortgage affordability calculator. However, the hard limit will always be how much the bank will approve you for – a mortgage pre-approval gives you that.

How long does it take to get a mortgage pre-approval? It can be done within an hour if you have your documentation together.

It takes less than a minute to fill out the application form on AQRE Lending to get started.

2. Shop around for a great pre-approval rate

Don’t just go to your local bank branch and expect to receive a great deal. Do your research and compare mortgage rates, or use a mortgage broker like AQRE Lending who will negotiate on your behalf.

Even half a percentage point can make a huge difference in your regular payments and the amount of interest you’ll pay over time. To see what we mean, plug your numbers into our mortgage payment analyzer, then change the interest rate in small steps. You’ll very quickly see the difference!

What happens after your mortgage pre-approval? Generally, you’ll have a 90 to 120 day period where your offered rate will be held for you. This is when you should begin house-hunting!

3. Assemble your documents

Collecting the documents, you need for a mortgage pre-approval and application can take time – so get started early. Ask your mortgage broker what documents are needed and start gathering them all in one place.

See our Mortgage Application: Checklist of Documents to get started!

4. Stay in touch with your broker

Stay reachable by phone or email, in case your mortgage broker has any questions about your documentation. If you aren’t available, they may make assumptions about your intent, and reject your mortgage pre-approval.

5. Read the fine print

Once you’ve been pre-approved, your loan officer will send through your pre-approval document. This document will outline the interest rate you’ll receive, the loan terms, and the mortgage amount you’ve been pre-approved for.

It may seem like financial jargon, but read the fine print as carefully as you can. If you have a family lawyer or accountant, it’s a good idea to have them take a look as well.


Looking for a mortgage broker in Ontario?

Get in touch with our expert mortgage brokers at AQRE Lending. We work for YOU, not the banks. Low down payment, poor credit, real estate investors, new to Canada, we do it all!

And since our business is built primarily through referrals from satisfied customers, your positive mortgage experience is essential to us.

So fill out our 1-minute application to see your Ontario mortgage options.


Mortgage pre-approval mistakes (the don’ts)

The path to ruin is paved with good intentions, but it’s also paved with silly mistakes. Here are four rules that, if you stick to them, will help you achieve pre-approval success.

1. Don’t get pre-approved over your budget

Don’t make the upper ceiling of your mortgage pre-approval your maximum purchase price. Do your own calculations, figure out how much you can afford monthly (don’t forget the other costs associated with homeownership, not just the mortgage), and go from there.

2. Hold off on major purchases

Once you’ve submitted your documentation to your loan officer, your financial situation shouldn’t change from pre-approval to loan finalization.

Changes to your financial situation could ultimately result in loan rejection, even if you were initially pre-approved. To avoid rejection, don’t make any major purchases that change your debt service ratios.

3. Don’t apply for new credit

You also shouldn’t apply for new forms of credit, like a personal loan or credit card, and don’t co-sign a loan for a friend or family member. Your debt level and available credit are both factors in mortgage approval, so increasing them may risk your pre-approval.

4. Don’t quit or change jobs

Finally, try to avoid changes to your employment status after you’ve been pre-approved. Steady and predictable income is crucial to most mortgage applications. Changing jobs or becoming self-employed will most likely throw a wrench into the mortgage approval process.

Instead, if possible, hold off on changing employers or starting a company until AFTER you have the keys to your new place.

If the worst should happen, and you are fired or made redundant, more about how to handle this situation without necessarily jeopardizing your pre-approval. 


The bottom line

As with many things in life, planning ahead makes all the difference. After all, getting a mortgage pre-approval is its own form of forward planning!

Take the time to get your finances in order before you apply for a mortgage pre-approval, shop around for the best rate and keep your finances consistent. Achieve that, and you should expect a seamless transition from pre-approval to your move-in date.

To get started, fill out our 1-minute application form and learn how much you could borrow today!

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