In Ontario, a mortgage pre-approval is a lender’s conditional commitment to loan you a specific amount of money for a home purchase, based on an initial assessment of your financial situation. Here’s how the process works:
1. Applying for Pre-Approval
You’ll need to provide the lender with:
✅ Income Verification – Pay stubs, T4s, employment letter, or tax returns if self-employed
✅ Credit Check – Lenders assess your credit score and history
✅ Debt & Expenses – Details on loans, credit cards, car payments, and other financial obligations
✅ Down Payment Proof – Bank statements or investment accounts showing available funds
✅ Property & Location (if known) – Some lenders consider where you’re buying
2. What You Get from a Pre-Approval
🔹 A pre-approved mortgage amount (the maximum loan you qualify for)
🔹 An interest rate hold (typically for 60-120 days) to protect you from rate increases
🔹 An estimated monthly payment based on the loan amount and interest rate
3. Limitations & Conditions
🔸 A pre-approval is not a guarantee of final mortgage approval—it’s conditional on:
- The property meeting lender requirements (appraisal, location, condition)
- No major financial changes (job loss, new debt, credit score drop)
🔸 Your final mortgage approval happens when you make an offer and the lender does a full assessment
4. Benefits of Getting Pre-Approved
✔ Know Your Budget – Helps you focus on homes within your price range
✔ Stronger Offer – Sellers take pre-approved buyers more seriously
✔ Lock in Rates – Protects you from interest rate increases while house hunting