A pre-approval tells you what you can borrow, locks a rate while you look, and makes your offer stronger. Here is what it involves, what you need, and what it does not do.
A mortgage pre-approval is a lender's conditional commitment to lend you up to a stated amount at a held rate, based on a real review of your income, credit and down payment. It is the first thing a serious buyer in the GTA should have, and the thing sellers' agents ask about before they take an offer seriously.
A pre-qualification is an estimate based on what you tell a lender. Nothing is verified. A pre-approval is based on documents and a credit check, and it comes with a rate hold. Only the second one means anything when you make an offer.
The documents depend on your situation, but a typical file includes:
You can absolutely be pre-approved. The documentation is different, and some lenders are far better than others at reading a self-employed file. That is exactly where a broker earns their keep.
Lenders look at two ratios: how much of your gross income would go to housing costs, and how much would go to all debts including the mortgage. They also apply a qualifying rate that is higher than the rate you will actually pay, to make sure you could handle an increase. The result is a ceiling. Whether you should borrow up to it is a different question, and one we will talk through honestly.
It does not guarantee the final mortgage. The lender still has to approve the specific property, and your circumstances must not have changed. Do not take on new debt, change jobs or move your down payment around between pre-approval and closing without talking to us first.
Canadian Mortgage Group Corp is a mortgage brokerage licensed by the Financial Services Regulatory Authority of Ontario, Brokerage #11392. This page is general information, not financial advice or an offer of credit. Mortgage products, rates and approval are subject to lender criteria and change without notice (O.A.C.).
Once we have your documents, often within one business day. Complex or self-employed files can take a little longer.
It involves a credit check, which has a small, temporary effect. Multiple mortgage inquiries within a short window are treated as one by the credit bureaus, so shopping through a broker does not hurt you further.
Typically 90 to 120 days, matching the rate hold. If you have not found a home by then, we refresh it.
Yes. There is no cost and no obligation to proceed.
Yes. With less than 20% down the mortgage carries default insurance, which is added to the loan. The minimum is 5% on the first $500,000 of the price and 10% on the portion above that, up to the insured limit.
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