Get pre-approved

The Importance of Mortgage Pre-Approval

Before you start searching for your next home, it’s essential to understand how much you can comfortably afford. The best way to do that is by speaking with a qualified lender or mortgage broker to determine your borrowing power and financial readiness. In Canada, there are two common steps to this process — pre-qualification and pre-approval — and while they sound similar, they carry very different weight when it comes time to make an offer.

Mortgage Pre-Qualification

A mortgage pre-qualification is a quick, informal estimate of what you may be able to borrow based on basic financial details such as your income, debts, and assets. It can usually be done online or over the phone in a matter of minutes. While pre-qualification can give you a general idea of your price range, it is not a commitment from a lender and does not carry much weight in a competitive housing market. Sellers — and their agents — will view an offer supported by a pre-approval as much stronger and more reliable than one based on a pre-qualification.

Mortgage Pre-Approval

A mortgage pre-approval is a formal, detailed assessment of your financial situation. It requires documentation and verification by a lender or mortgage broker, and it results in a conditional commitment for a specific mortgage amount and interest rate (usually held for 90 to 120 days). Getting pre-approved offers several key advantages:

• Know your budget: You’ll understand exactly how much you can afford, including estimated monthly payments.
• Stronger offers: In a competitive GTA market, sellers take pre-approved buyers more seriously.
• Faster financing: Once you’ve made an offer, your mortgage can be finalized quickly, reducing stress and delays.

To get pre-approved, you’ll need to provide comprehensive documentation that may include:

• Proof of employment and recent pay stubs.
• T4 slips and Notice of Assessment from the past two years.
• Details of any loans, lines of credit, or credit cards.
• Verification of assets and savings (for your down payment and closing costs).
• Government-issued identification.

Your lender will independently verify this information to confirm your eligibility and determine the maximum mortgage amount you qualify for.

The Bottom Line

In the Greater Toronto Area’s competitive real estate market, being pre-approved gives you a distinct advantage. It signals to sellers that you are serious, financially qualified, and ready to move forward — often making the difference between winning or losing in multiple-offer situations. If you’d like an introduction to one of Michael’s trusted mortgage professionals, reach out anytime — we’ll connect you with experienced lenders who can help you get pre-approved and position you for success.