Getting Started
Pre-Qualified vs. Pre-Approved
Firstly, it is important to differentiate between getting pre-qualified, and getting pre-approved. They are not the same thing! You can typically get pre-qualified over the phone, the Internet, or at your local bank branch within minutes. A pre-qualification does not bind the lender to any particular interest rate, nor does it guarantee your approval. It is a very basic check to determine your maximum borrowing amount. You are not required to provide your Social Insurance Number, nor give consent to the mortgage broker/lender to request your Credit Bureau Report in order to get pre-qualified.
In contrast, a pre-approval is a written commitment issued by the lender to honour the quoted interest rate for a specific period of time, usually 120 days. To obtain a pre-approval, you must be prepared to provide your Social Insurance Number and either written or verbal consent to the mortgage broker and the lender to obtain your credit bureau history. Going through the exercise of obtaining a preapproval will eliminate any issues that may prevent or delay your application and final transfer of funds, such as unresolved collections on your credit bureau report; or discovering that your RRSPs have decreased in value since receipt of your last statement.
Although a pre-approval carries more weight than a pre-qualification, there are still many conditions attached to that pre-approval that you must meet prior to the lender giving you a firm commitment. With its standard clauses, a pre-approval is about 3 - 5 pages long. Should you not be able to satisfy all the conditions outlined in the pre-approval, the lender is under no obligation to honour the quoted interest rate, nor advance the funds. Taking the following steps before we begin the application will greatly increase your chances of the pre-approval becoming a firm approval without any hiccups.
