Getting a mortgage pre-approval is the first step to buying a home and if you’re looking for a house you have probably heard the term “pre-approval” once or twice. Which means you might be wondering what is a mortgage pre-approval? Why do I need one? How do I get one? Especially if you’re a first time home buyer! Let’s talk about everything and anything you need to know in order to get pre-approved for a mortgage.


Pre-approval is the conditional agreement to actually receive a mortgage. Your down payment and income documents have been verified, and you receive a conditional agreement for an exact loan amount. 


There’s a lot of benefits for you when you receive a pre-approval:

  • You will know the maximum amount of money that you qualify for and therefore can start shopping in your price range.
  • You will have a good idea of what your monthly mortgage payments will be and can start budgeting accordingly. It’s a great way to decide if the payments work for you and your budget.
  • You will know what rates are currently available to you and can even lock in a rate for anywhere between 60 – 120 days depending on your lender.
  • Already having a pre-approval speeds up the buying process and lets sellers know you’re serious!


Lenders will look at a few different things when determining your qualifications, rates and loan amount.These are the considerations made when determining pre-approval:

  • Your down payment. You will need a minimum 5% of the purchase price of your home but the higher the down payment the better your application will look.
  • Your credit score. Lenders will use your credit score as an indication of the risk associated with loaning you a mortgage.
  • Your debt-income ratio. This is a ratio based on how much debt you have compared to how much income you have and lenders use it to determine your financial capacities.


You will need to provide financial documents in order to receive a pre-approval. Here’s what you will need:

  • Government-issued identification
  • Financial statements to prove your down payment
  • Proof of employment and your most recent pay stubs. You may need to request these from your employer. Make sure your letter of employment states your start date, your position and your salary!
  • Government tax documents such as T4’s, notice of assessments and annual tax filings.


You’ll want to get a mortgage broker and the sooner you talk to one the better! When you’re working with an experienced mortgage professional they will be able to assist you in the application by putting together a detailed review of your financial information, giving you tips on how to improve your application, capitalizing on opportunities to improve the mortgage amount or rates, and speaking with lenders on your behalf. Your broker will ensure that you receive the best rates possible and teach you the differences between the loans you qualify for. 

Now that you know the ins and outs of a pre-approval you might be thinking “where do I start?” or “when do I start?” Start by getting your documents together and reaching out to a mortgage broker, and start now! It is never too early to start looking for a pre-approval. There is no obligation when you work with a mortgage broker, but there is a ton of insight to gain by receiving a pre-approval or at least exploring your options. 

Once your application is complete your broker will send it off to a variety of lenders and if everything checks out you will receive a letter of pre-approval and that’s it! You are one step closer to buying a home! 

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Providing solutions for over 16 yrs in the industry. Big Bank Experience – in financial advisory roles – specialized in real estate lending. More content here.