The short version
- A pre-qualification is a quick estimate based on what you say. A pre-approval reviews your documents and credit.
- A pre-approval can hold a rate, often for 90 to 120 days.
- It is not a final approval. The lender still has to approve the property and confirm nothing has changed.
- Do not change jobs or take on new debt until you close.
The difference
| Pre-qualification | Pre-approval | |
|---|---|---|
| Based on | What you tell us | Your documents and a credit check |
| Time | Minutes | Usually 1 to 3 business days |
| Holds a rate | No | Often, for 90 to 120 days |
| Useful for | Early planning | Shopping and making offers with confidence |
How much you can borrow
Lenders look at two ratios: how much of your income goes to housing, and how much goes to all your debts. They also test you at the higher of your contract rate plus 2% or 5.25% (OSFI). That stress test is why your approved amount is often lower than you expect. Try my affordability calculator for a quick estimate.
What to bring for a pre-approval
- Government photo ID
- Employed: a recent pay stub, an employment letter and your latest T4 or Notice of Assessment
- Self-employed: two years of T1 Generals and Notices of Assessment, plus business financials if incorporated
- Proof of down payment: 90 days of statements for savings, FHSA, RRSP or TFSA, or a signed gift letter
- A list of debts: car loans, lines of credit, credit cards and support payments
- If you own property now, your mortgage statement and property tax bill
What a pre-approval does not cover
The lender still has to approve the specific property, sometimes with an appraisal, and confirm your situation has not changed. Keep making payments on time. Do not open new credit, finance a car, or change jobs before closing without talking to me first.
Make your offer stronger
In a competitive offer, a solid pre-approval and an agent who has spoken to the listing agent make a difference. I can help with both, the mortgage and the offer, and you are never required to use both services.
Get pre-approved before you shop
Book a 30-minute call. I will review your situation, tell you what to send, and get your rate held while you look.
This guide is general information, not financial, legal or tax advice. Programs, rates and rules change; confirm the details for your situation before you act. Mortgage information is provided by Ashraful Khan, Mortgage Broker, Lic. #M22000883, Mortgage Alliance Inc., FSRA Licence #10530. Real estate information is provided by Ashraful Khan, Sales Representative, Royal LePage Ignite Realty, Brokerage, Independently Owned and Operated.