Mortgage Services
A documented pre-approval is the only one that gives you certainty. Here's how to get one.
By Kyle Scott, Licensed Mortgage Broker, BCFSA #504479. Based in Victoria, serving clients across BC.
Book a CallQuick Takeaways
The short version, before you read the rest:
A real mortgage pre-approval means a broker or lender has reviewed your documents, verified your income and credit, and you have received a conditional commitment in writing to a specific loan amount and rate hold. It is not a number from a calculator, and it is not a five-minute phone call with a bank rep. If you are planning to make an offer in the next 6 to 12 months, the documented pre-approval is the only one that protects you.
The Basics
A mortgage pre-approval is a process where you go through a full mortgage application and supply any documentation that a lender may need to approve and fund your mortgage loan. Often, it comes with a rate hold where you get a lender's written commitment to lend you a specific amount, at a specific rate, for a specific period based on certain conditions and criteria.
These are typically conditional, since lenders rarely (if ever) do a full underwritten pre-approval anymore. This has been a change over the past 10 to 15 years in the mortgage industry.
In most cases, lenders are no longer committing resources to pre-approvals because the vast majority of pre-approvals never turn into a funded mortgage. This means if you do not have an accepted offer on a property, you are rarely getting a solid “look under the hood” of your situation.
This is where we come in as mortgage brokers. We understand exactly what any potential lender will look for in an applicant. The pre-approval stage is where we can work with you to solve future problems, before they become deal-breakers.
As a borrower, you need to be very careful. The word “pre-approval” gets used loosely. Calculators on bank websites give you a pre-approval estimate. A 10-minute call with a bank rep gets called a pre-approval. Neither one is documented, and neither one can expose potential issues with your file that you are unaware of.
An underwriter (the person reviewing and approving your file at your chosen lender) works for the bank or lender. They are in the risk management business. Their job is to poke holes in a mortgage file to ensure their employer is not taking on too much risk by lending to you.
They are the gatekeepers. If you are not prepared and your file is not solid, they will not take unnecessary risks by lending to you.
This is why a documented pre-approval should include three things:
Anything short of all three is a pre-qualification, an estimate, or a rate hold dressed up in fancier language.
Know the Difference
Three things often get used interchangeably. They are not the same.
An online calculator asks for your income, debts, and down payment, and outputs a number. There is no verification or nuance. The calculator does not know if you have a 620 credit score or an 800. It does not know that the bonus income you typed in cannot be used because you have only earned it for one year. It is a starting point, nothing more.
A pre-qualification is one step up. You have a brief conversation with a lender or broker, share rough numbers, and they tell you what you would likely qualify for. Still no documents, still no credit pull, still nothing in writing. Useful for an early read. Useless when you are ready to write an offer.
A pre-approval is what we have been describing. Documents in, credit pulled, a real lender's name on a real letter, with a rate hold attached.
| Calculator | Pre-qualification | Pre-approval | |
|---|---|---|---|
| Documents verified? | No | No | Yes |
| Credit pulled? | No | No | Yes |
| Written commitment? | No | No | Yes, with rate hold |
| Worth in an offer | None | Very little | A real position |
I get calls every single week from people in a panic because they thought they were pre-approved, but their file is falling apart at the eleventh hour because proper due diligence was not done up front.
A few weeks ago I got a call from a realtor friend of mine who was helping a buyer. The buyer was certain that they had been through the pre-approval process and everything was good to go. After getting an offer accepted, it turned out the “pre-approval” had only involved a soft credit check. When the full check was finally done with a house under contract, it came back showing that the buyer had been discharged from a consumer proposal recently. The buyer knew about the proposal, of course. It never came up with the lender at the front end because all the lender saw was a credit score that was “good enough.”
If you are searching for a “mortgage pre-approval calculator” right now, that is a fine starting point. But do not go house hunting based on what a calculator says you can afford. The number it gives you has no real-world context, and the consequences often show up when there is no time to fix things.
Documents
To get pre-approved, you'll need to provide proof of income, identification, proof of down payment, and details on your existing debts. Institutions will want to pull your credit. Working with a broker allows you to explore multiple lenders' offerings with only one credit pull. The full document list takes most clients an hour or two to gather, and once it is in our hands, we can usually have you pre-approved within 24 to 48 hours.
Here is the standard document list for a Canadian mortgage pre-approval:
Employed Applicants
Self-Employed Applicants
For Everyone
Gifted Down Payment
A couple of things to keep in mind, because they trip people up almost every time. The first one is that the documents people pull from their CRA account often are not sufficient. It is hard to believe, but 9 times out of 10, those documents do not actually have your name and other identifying details on them in the format a lender needs. The proof of income from CRA also does not replace the T1 Generals. We need the full thing.
The other big one is bank statements. Each bank in Canada uses a different format, and the big 5 banks often have statement formats that are not accepted by lenders out of the box. We need to see your name, address, and account number on every statement. We also cannot accept statements with information redacted. I know how it feels handing over that level of personal information. As a mortgage professional, I can tell you we have reviewed thousands of bank statements. We do not pay attention to the transaction history or what you are spending money on. We are looking for the down payment funds and the source.
Our Process
The process from first call to written pre-approval is short when documents are ready. Long when they are not.
Here is what a typical pre-approval timeline looks like with us:
01
20 minutes
A call to understand what you are trying to do, what your timeline is, and whether a pre-approval is even the right next step. For some clients it is not. A buyer who is 12 months out from purchasing may not need a full pre-approval today. They need guidance on how to get ready.
02
10 to 15 minutes for the application; 1 to 3 days for documents
We send you a secure link to a digital application and a clear list of the documents we need. You upload everything when you are ready. Most clients have a full document package back to us within three days of completing the application.
03
1 to 2 business days
We fully underwrite your file with the same lens any prospective lender would use. We figure out your qualifying income, pull credit, review the down payment to confirm it is compliant, and run the qualifying numbers through the federal stress test. In most situations, the stress test requires you to qualify at the higher of your interest rate plus 2%, or 5.25%.
04
Same day
You receive a detailed budget sheet from us with a video walking through the numbers. You typically see three to seven options from different lenders. The budget includes your maximum purchase price, closing costs, rates, terms, and amortization. Everything you need to make an informed decision. Once you choose the lender and term, we submit for the rate hold.
The full process is usually two to five business days when documents are organized. It can stretch longer if income verification is complicated (recent job change, self-employment, foreign income) or if there are credit items to address.
One important clarification: at Landmark Mortgages, your application is a fluid thing. We do not toss your application out after a 90-day rate hold expires. If your search takes 6 months or even a year, we do not make you start over, and you do not have to worry about explaining your situation to a different person every couple of months. We update the documents that need updating, refresh your numbers, and make sure you are ready to go when the right property comes along.
For a fuller walk-through, see our Our Process page.
Rate Holds
A mortgage pre-approval does not have a hard expiry date. As long as your income and credit situation stay the same, your qualification does not really change. The one moving piece is interest rates: when rates fall, your borrowing power can increase, and the opposite is true when rates rise. This is why a rate hold is so important.
Rate holds typically last 90 to 130 days, depending on the lender. The rate hold is what adds the extra layer of protection. With a rate hold in place, if rates rise during your hold period you keep the lower rate; if rates fall, most lenders will let you take the new lower rate at the time of your offer.
After a rate hold expires, it can usually be renewed with updated documents.
Different lenders offer different rate hold lengths. Most are 90 to 120 days. A few stretch to 130 days. If you are early in your search and rates are climbing, asking for a longer rate hold can be valuable.
The earlier you start, the better the chance of locking in strong pricing. In my experience, the more proactive you are, the cheaper your mortgage will be.
If your pre-approval expires before you find a home, do not panic. Renewing is faster than the original because the file is already on hand. It usually takes a fresh credit pull and updated income documents. Our lender relationships also let us pull some strings to extend rate holds in many cases.
Important Distinction
No. A pre-approval is a strong indication that you qualify based on what the lender has reviewed so far, but it is not the final approval. Final approval happens after you have an accepted offer and the lender has reviewed the property itself. Between pre-approval and closing, the lender will verify that nothing has changed on your end and confirm that the specific property meets their lending criteria.
A pre-approval covers the borrower side of the equation. Final approval adds the property side. Both have to line up for the mortgage to fund.
This is one of the most important distinctions on this page. A documented pre-approval gives you a high level of certainty about what you can afford and what rate you will pay. It does not guarantee that any home you write an offer on will be financed, because the property has not been reviewed yet.
What Can Go Wrong
Yes. A pre-approval is a strong indication, but it is not a final approval. You can still be denied between pre-approval and closing if your financial situation changes, if the property does not appraise, or if new debts appear on your credit report. The good news: a documented pre-approval makes denial much less likely, because we have already verified the bulk of your file.
Common reasons a pre-approval falls apart at the offer stage:
This is why a documented pre-approval matters more than a calculator estimate. The calculator number assumes everything will work out. A real pre-approval means the lender has already done most of the work, so the surprises at closing are smaller and rarer.
A real example: one of our first-time home buyers was looking to purchase his first home with his wife. They finally found a property that checked all the boxes, but the day after they got the property under contract, he was laid off. That was going to be a problem with his pre-approval, because we could no longer use his income. We were able to switch gears and find a lender that could approve them based on his wife's income alone. His industry let him find new employment quickly, the bills did not pile up, and the deal closed.
Broker vs. Bank
When you walk into your bank for a pre-approval, you are seeing one lender's products. That bank will pre-approve you against their own rate sheet, their own qualifying rules, and their own debt service ratios. If you do not fit, you are told no, and you start over somewhere else.
When you work with a broker, the same documents go to multiple lenders. Some lenders are more flexible on self-employed income. Some have better rates on rental properties. Some are faster than others. The pre-approval you end up with reflects the right matches, not just whoever you happened to walk in to.
A few specific differences:
We operate as a small business. Our number one priority is a happy client. We want a long-term relationship with you that goes beyond a single mortgage funding.
Long-Term Clients
We have clients where we have done more than 5 mortgages just for them!
We have walked some clients through their first mortgage, their first move-up, an investment property, and a renewal, all over the course of years.
FAQ
Tap a question to expand the answer.
Sources
This page provides general information about mortgage pre-approvals in British Columbia. It is not personalized financial, legal, or tax advice. Lender policies, qualifying rules, and rate hold periods change. For advice specific to your situation, please contact us directly.
Get Started
One call usually gives you a clear answer. No pressure, no obligation, no sales pitch.
