Home Buying Guide: Mortgages & the Pre-Approval Process

Understanding Mortages

Before approaching lenders you should familiarize yourself with some basic mortgage concepts. You can start by reading the RealtyLink In Print article: Common Mortgage Terms Defined.

Get Pre-approved

Pre-approval of a mortgage is when your lender has reviewed all your financial information and has determined the maximum amount of money you can borrow. The advantages to pre-approval include:

  • You know how much you can borrow, so you don't waste time looking at properties you can't afford.
  • You don't have to worry about rising interest rates while shopping for a home, as usually the mortgage broker will guarantee the current interest rate for 60 - 90 days.
  • You have an edge when you make an offer, because the seller knows you're more likely to get a loan.
  • You save time when you apply for your loan because you've already assembled your paperwork.


Where to get Pre-approved

Many banks and financial institutions are competing for your business so it makes sense to shop around for a mortgage. Most lenders will reduce their posted interest rate so don't be shy about bargaining. Your ability to bargain for a low rate and a flexible mortgage will often depend on how much business you have with the institution. You can contact banks and credit unions directly, or work with a mortgage broker. A broker will help you find a lender and the best mortgage package.

Once you have selected your lender, you will need to provide your financial information. Your lender will want the following:

  • Personal information such as number of dependents and marital status;
  • Details of employment, including a letter from your employer verifying your salary;
  • Banking and investment information;
  • Details of your assets (i.e.- a car, other property);
  • Information on loans and other liabilities;
  • Permission to do a credit check.


Once your application is complete, you will know how much you can borrow and you will be ready to start searching for a home. For more information, contact your REALTOR® or your financial institution, or log onto the Canadian Mortgage and Housing Corporation and the Canadian Bankers Association web sites.

Source: www.realtylink.org