When thinking about buying a home, you probably feel a combination of excitement and a bit of overwhelm. There’s a lot to know, the real estate market is constantly changing, and it’s a massive financial investment so the stakes are high. For most Canadians, the path to buying a home starts with financing. So let’s discuss one of the most important steps you’ll take when buying a home.

What is a pre-approval

A purchase has two main ingredients – 1) the borrower, you, and 2) the property you want to buy.

With a pre-approval, we look at all available information for your personal application – income, employment, down payment, credit history, debt/liabilities, etc. Since you’re still looking for the property, we just estimate the relevant details like property taxes, location, and strata fees (if applicable). Some properties are very difficult to finance, and I can provide a checklist of what to avoid.

This is a great learning exercise because there are a lot of small rules and laws that you probably don’t realize exist. If there are any issues that come up, we can come up with a solution early, when the pressure is lower. That way it doesn’t have to disrupt your purchase or your sleep.

Pre-approval requirements

Since this is more of an ‘exploratory mission’, there aren’t any particular lending requirements at this point. The goal will be to look at your application, then decide which lender and mortgage product would be the most appropriate.

Here’s a idea of what we’ll go over

  • Two pieces of Identification
  • Proof of income and employment
  • 90 day proof of down payment
  • Credit history and debt

Since every situation is unique in some way, it’s usually easiest to have a quick call to discuss your finances. Then I’ll send you a checklist of documents to move forward with the pre-approval.

Benefits of getting pre-approved

How it Works

Step 1: Book a discovery call

We’ll meet for about 30 minutes and discuss your goals and concerns. I’ll ask a few questions to make sure nothing gets missed By the end of the call, you’ll have a solid understanding of how a pre-approval will help you and what to do next in your journey. I’ll send you a checklist of documents and an explanation of the next steps, then the ball is in your court. I’m not going to pressure you to move forward.

Step 2: Get pre-qualified to buy

Once you send me your documents, my team will review your financials and run scenarios to calculate how much you can afford. If there’s anything to deal with, this is when we typically address them and find solutions. We’ll discuss possible lender options and features, but you don’t need to settle on anything just yet until you actually find a property. Because lenders are always coming out with new promotions and offers.

Step 3: Find a home and make an offer

With a pre-approval under your belt, you’re ready for the fun part. Your Realtor can take you to home viewings. When you’ve found a place to purchase, I’ll work closely with your Realtor to make sure the approval is smooth. This is the time where we finalize the lender selection.

Frequently Asked Questions

A little bit. We’re talking about approximately 3 points out of 900. But it’s important to uncover anything on your credit bureau that should be addressed early. For example, I’ve had clients who always pay their bills on time have a collection from telecom companies because of a clerical error. Small things like that can cause big problems if we don’t know about them early on in the process.

We’ll ask for a list of documents. Including (but not limited to):
1) Letter of employment
2) Proof of down payment
3) Tax documents showing income
4) Recent pay stubs

Technically yes, but it’s not a great idea. You might make an offer on a home you can’t afford. Or you might have problems in your finances that surprise you later and end up costing a lot of money.

No, that’s called a rate hold. Rate holds are available from a select few lenders, but the’re typically quoted at a higher interest rate than what’s available on a ‘live offer’, so it’s not always worthwhile to secure a rate before you find a home. It depends on what’s happening in the mortgage market, so we’ll discuss this on your discovery call.

No, funding is never guaranteed. Approval always comes from the lender. What I provide is a review of your finances to identify potential problems so they can be addressed early.