There are three steps in the financial world of buying a home: pre-qualification, pre-approval and final approval (as they relate to mortgages).
- Pre-Qualification: is meeting with a mortgage broker, permitting a credit check to be performed and sharing your overall financial picture. Once all this information has been submitted, the mortgage broker will provide you with a purchase range. They should also give you an idea of what the monthly payments will be like.
- Pre-Approvals: this happens when all your paperwork (T-4’s, Pay Stubs etc.) has been given to the mortgage broker. This confirms the bank’s willingness to provide a mortgage.
- Final Approval: once we have found a property that we would like to offer on, we need to get the bank’s approval. The mortgage broker will submit our offer to the bank and they will confirm the amount of mortgage they would like to provide you. In today’s heated market, we will often ask for this in advance of putting in an offer. In other instances, this is done after we have an accepted offer.
To read the full PDF from the CREA, please click here.
Read about the difference between a Mortgage Broker and Bank, click here.