Mortgage pre-approval: What it is and how to get one
Before you fall in love with a house, get a mortgage pre-approval. It estimates how much a lender is willing to lend you and locks in a rate — typically for 90 to 120 days — while you shop.
What a pre-approval actually is
A pre-approval is a conditional estimate, not a guarantee. The lender reviews your income, debts, and credit history, then tells you the maximum mortgage you can qualify for and holds a rate for you.
What documents you will need
- Proof of identity (government-issued photo ID)
- Letter of employment and recent pay stubs
- Two years of T4 slips or Notices of Assessment if self-employed
- Bank statements for your down payment accounts
- Details of debts, loans, and monthly obligations
Why a pre-approval matters
- You shop with a real budget instead of guessing at your price range.
- Sellers take your offer seriously because financing is likely to close.
- Your rate is protected. If rates rise during your 90–120 day window, you keep the lower held rate; if they fall, you usually get the better one.
Common traps to avoid
- Assuming the pre-approved maximum is what you should spend. Lenders approve based on formulas, not your lifestyle. Leave room for property taxes, utilities, and life.
- Letting the rate hold expire. Most lenders will extend or re-issue one, but ask.
- Making big purchases before closing. A new car loan the week before your mortgage funds can derail the deal.
Tip: Get pre-approved with more than one lender, or work with a broker. A held rate is not a commitment — comparing is still worth it.
The bottom line
A pre-approval costs nothing, protects you from rising rates, and makes you a stronger buyer. Get one before your first showing, then compare the actual offers when you find the right place.
This article is for informational purposes only and does not constitute financial advice. Rates and product details change frequently — always compare current offers before making a decision.
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