What Is a Mortgage Pre-Approval?
A mortgage pre-approval is a lender's conditional commitment to provide a mortgage up to a specific amount, at a guaranteed interest rate, for a set period of time. It involves a full review of financial information — including income, debts, assets, and credit history — to determine borrowing eligibility.
Unlike a casual estimate, a pre-approval is backed by a formal credit check and underwriting review. The result is a written pre-approval letter that confirms the maximum mortgage amount and the rate hold period (typically 90–120 days).
Key Takeaway
Pre-Approval vs. Pre-Qualification
These two terms are often used interchangeably, but they represent different levels of assessment:
| Factor | Pre-Qualification | Pre-Approval |
|---|---|---|
| Credit check | No (soft inquiry or none) | Yes (hard credit pull) |
| Income verification | Self-reported | Documented and verified |
| Rate hold | No | Yes — typically 90–120 days |
| Commitment from lender | Informal estimate | Conditional commitment in writing |
| Strength when making an offer | Weak | Strong — shows financial readiness |
| Time to complete | Minutes | 1–3 business days |
✅ Bottom Line
Documents Needed for Pre-Approval
Lenders require documentation to verify income, employment, assets, and liabilities. Having these ready speeds up the process significantly.
| Category | Documents Required |
|---|---|
| Identification | Two pieces of government-issued ID (driver's licence, passport) |
| Income — Employed | Recent pay stubs (30 days), T4 slips (2 years), employment letter confirming salary, position, and tenure |
| Income — Self-employed | T1 Generals + NOAs (2 years), business financial statements, T4A or T5 slips if applicable |
| Down payment | Bank/investment statements (90-day history), gift letter if using family funds |
| Debts & liabilities | Credit card statements, car loan details, student loans, lines of credit, any existing mortgages |
| Property (if known) | MLS listing, purchase agreement (if already in hand) |
⚠️ 90-Day Bank History
The Pre-Approval Process
From start to finish, a mortgage pre-approval in BC typically takes 1–3 business days. Here's how the process works:
Submit an application
Complete a mortgage application with a broker or lender. This includes personal information, employment details, income, assets, and liabilities.
Credit check
The lender pulls a full credit report. This is a hard inquiry and may temporarily lower the credit score by a few points. A minimum score of 600 is typically required for A-lender approval, though 680+ is preferred.
Document review and underwriting
The lender verifies income, employment, and debt levels. The application is assessed against the federal stress test — confirming qualification at the contract rate plus 2%, or 5.25%, whichever is higher.
Rate lock and pre-approval letter
Once approved, the lender issues a pre-approval letter confirming the maximum mortgage amount and the guaranteed interest rate. This rate is typically held for 90–120 days.
Check Your Affordability
Estimate the maximum purchase price based on income, debts, and current rates.
How Long Does a Pre-Approval Last?
Most lenders hold the pre-approved rate for 90–120 days. During this period, even if market rates increase, the locked-in rate remains available. If rates drop, most lenders will honour the lower rate at the time of closing.
- Rate hold expires before closing? The pre-approval can usually be renewed, but the new rate will reflect current market conditions.
- Rate increases during hold period? The locked rate is protected — the original pre-approved rate applies.
- Rate decreases during hold period? Most lenders will apply the lower rate. Confirm this when the pre-approval is issued.
💡 Pre-Approval ≠ Final Approval
Common Pre-Approval Mistakes to Avoid
A pre-approval is conditional on financial circumstances remaining stable. These common actions can jeopardize or void a pre-approval:
- Changing jobs — Lenders verify employment before final approval. Switching employers, going from salaried to self-employed, or entering a probationary period can delay or disqualify the application.
- Taking on new debt — Financing a car, opening new credit cards, or increasing credit card balances changes the debt-to-income ratio. Even a small change can push the application over the qualifying threshold.
- Making large undocumented deposits — Cash deposits or large transfers without a clear paper trail raise red flags during final underwriting. All funds must be traceable.
- Co-signing for someone else — Co-signing a loan or credit application adds that full debt to the liability calculation, potentially reducing the eligible mortgage amount.
- Missing payments — Late payments on any credit account during the pre-approval period can lower the credit score and trigger a reassessment.
Key Takeaway