The Dos and Don’ts of Acquiring a Mortgage Pre-Approval 

Acquiring a mortgage pre-approval is one of the best things you can do to streamline the process and boost your confidence in your home purchasing power. Learn the dos and don'ts of acquiring a pre-approval.
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A pre-approval tells you how much you can borrow with little risk. However, as with anything mortgage-related, you’ll want to understand the pre-approval process before you begin.


The DO’s of Mortgage Pre-approval

The mortgage pre-approval process isn’t rocket science, but it’s critical. If you read and follow these five tips, you’ll be able to get a great deal on your mortgage.

First, apply for a mortgage pre-approval

The majority of Canadians believe that the first step in the home-buying process is to contact a realtor and begin looking at properties. This is incorrect. The first step is to apply for a mortgage pre-approval. After all, if you find a home you like, you’ll want to move as soon as possible. Pre-approval for a mortgage eliminates an extra step in the process.

Being pre-approved also enables you to determine how much you can afford to spend.

The hard limit, however, will always be how much the bank will approve you for – a mortgage pre-approval provides you with that details. 

How long does it take to get a pre-approval for a mortgage? If you have all of your documentation ready, you can complete it in an hour.

Second, look around for a low pre-approval rate

You should shop around for the best mortgage rate, just as you would for a home before deciding on ‘the one.’ Don’t expect to get a good deal just by going to your local bank branch. Do your homework and compare mortgage rates, or hire a mortgage broker to do the work for you.

Even a half-point difference in your regular payments and the amount of interest you’ll pay over time can make a big difference.

What happens after you get pre-approval for a mortgage? In most cases, your offered rate will be held for you for 90 to 120 days. This is the time to start looking for a home.

Third, gather your documentation

Collecting the documentation required for a pre-approval and application can take time, so get started as soon as possible. Inquire with your mortgage broker about the documents needed to finalize your loan, and begin gathering them all in one place.

To get you started, here’s a typical list:
  • Identification: This proves that you are who you say you are.
  • Bank account and investment statements: These demonstrate to prospective lenders that you have the ability to make your monthly payments.
  • Proof of assets: Displaying your assets, such as a car, cottage, or boat, allows lenders to calculate your net worth, or how much money you actually have.
  • Proof of income: Pay stubs or a letter from your employer will suffice to reassure prospective lenders. If you are self-employed, you will need a notice of assessment.
  • Information about your debt: You must provide information about student loans, car loans, and credit cards. Lenders have access to databases containing this information and hiding it will make you look bad.
Fourth, keep in touch with your broker

Keep your phone number handy in case your mortgage broker has any questions about your documentation. This includes avoiding vacations and business trips where you will not have access to email or phone. 

If you are not available, they may make assumptions about your intentions and deny your pre-approval. If you must leave town, make sure to notify your mortgage broker ahead of time.

Lastly, evaluate the terms and conditions

Your loan officer will send you a pre-approval document once you’ve been pre-approved. This document will detail your interest rate, loan terms, and the mortgage amount you’ve been pre-approved for. It may appear to be financial jargon, but it is critical to carefully read the fine print on each page. It’s a good idea to have a family lawyer or accountant look over the documents as well.


Man warning and gesturing no with the finger

The Dont’s of Mortgage Pre-approval

The road to ruin is paved with good intentions, but also with stupid mistakes. Here are four rules to follow if you want to be successful with pre-approvals.

First, don’t get pre-approval for anything that isn’t in your budget

Don’t set your maximum purchase price based on the upper limit of your mortgage pre-approval. Make your own calculations, determine how much you can afford to pay each month (don’t forget about the other costs associated with homeownership, not just the mortgage), and proceed from there.


Second, hold off on making large purchases

Your financial situation should not change from pre-approval to loan closing once you’ve submitted your documentation to your loan officer. Even if you were pre-approved, changes in your financial situation could result in loan rejection. Make no major purchases that will change your debt service ratios to avoid rejection.

Third,  applying for new credit is not a good idea

You should also refrain from applying for new forms of credit, such as a personal loan or credit card, and from co-signing a loan for a friend or family member. Because your debt level and available credit are both factors in mortgage approval, increasing either of them may jeopardize your pre-approval.

Lastly, do not resign or change jobs

After you’ve been pre-approved, try not to change your employment status. Most mortgage applications require consistent and predictable income. Changing jobs or going self-employed will almost certainly cause a snag in the mortgage approval process. Instead, if possible, wait until you have the keys to your new place before changing jobs or starting a business. If you have a job offer that is simply too good to turn down, you can learn more about how to handle this situation without jeopardizing your pre-approval.

If the worst happens and you are fired or retrenched, it is probably a good idea to put off buying a home until you have regained financial stability.


As with many things in life, planning ahead of time is crucial. After all, obtaining a pre-approval is a form of forward planning in and of itself! Before applying for a mortgage pre-approval, get your finances in order, shop around for the best rate, and keep your finances consistent. If you can do that, you should have a smooth transition from pre-approval to move-in date.