01. Locks your rate for 90–120 days
While you're house hunting, rates can move. A pre-approval holds your rate so if they go up before you find a place, you're protected. If they go down, you get the lower rate.
Your first real step isn't Realtor.ca.
A pre-approval is the difference between house-hunting with confidence and making offers you can't back up. Here's exactly what it is, what it isn't, and how to get one - without the runaround.
Not a formality. Not a piece of paper. A real tool that changes how you buy.
While you're house hunting, rates can move. A pre-approval holds your rate so if they go up before you find a place, you're protected. If they go down, you get the lower rate.
Not an estimate. A lender has reviewed your actual income, debts, and down payment. The number you get is one you can write an offer with.
Every federally regulated mortgage gets stress-tested at your contract rate + 2% (or 5.25%, whichever is higher). Your pre-approval number already accounts for this.
Credit problems, debt ratios, employment gaps - better to find these out now, not after you've written an offer on a place you love.
In a competitive market, sellers and realtors take pre-approved buyers seriously.
They sound the same. They're not. One is a guess; the other is a commitment from a lender.
“A pre-qualification tells you what you might get. A pre-approval tells you what you've got. Those are different things - and in a real estate market, that difference matters.”- Jeremy LaHaie
Most people start by going to their bank. The bank does a quick estimate, gives them a range, and sends them off to look at houses. That estimate isn't binding.
My process is more thorough upfront, which saves time later. I collect your documents, run your file through the lender's actual underwriting criteria, and come back with a number you can rely on.
I also give you a plain-language explanation of the math: what the stress test does to your maximum, how your GDS and TDS ratios work, and what would happen to your payment if rates moved by 1%.
And if something in your file needs work before we apply, I'll tell you now, not after you've written a $600,000 offer.
A soft credit check - which I do first - doesn't affect your score at all. A hard check typically reduces your score by about 5 points temporarily.
Usually 48–72 hours from the time I have your complete document package.
Tell me immediately - a new job, pay cut, or new debt can affect your approval. It doesn't necessarily kill the deal, but I need to know.
Yes, though the documentation is different and the process takes a bit longer.
A rate hold just locks a rate. A pre-approval confirms you qualify AND locks the rate.
Not technically, but I'd strongly recommend it - it means you're looking at the right homes and can move fast when you find the right place.
Questions answered by Jeremy LaHaie, mortgage professional with INVIS Inc., serving Winnipeg, Ste Anne, Steinbach, and all of Southeast Manitoba. Call or text (204) 995-7336.