For many people, the first step to buying a home involves perusing local real estate listings. While this can be an exciting exercise, before you begin house hunting, you first need to determine how much you can comfortably afford. After all, you don’t want to find the home of your dreams only to realize that it’s out of your price range! 


Affordability depends on a number of factors including your income, interest rates, down payment amount, housing costs and other financial obligations. Your mortgage agent can help you measure affordability or you can access free online calculators to help determine maximum mortgage amounts and your monthly payments. Once you’ve determine how much you can afford, your next step is to get pre-qualified for your mortgage. 



Pre-qualification provides you with an estimate of how much you can expect to borrow to finance your home. Your lender will conduct a preliminary assessment of your financial situation to determine how much they’re comfortable loaning. Your pre-qualification can be granted fairly quickly, there is no cost to you, it doesn’t affect your credit score and can be helpful when it comes time to making an offer. It also provides you with confidence that you’re searching for a home within your means. 


Being pre-qualified is only a general indication that you could be approved for a mortgage if you were to apply – it’s not a guarantee of financing or loan approval. Additional information and documentation must meet your lender’s criteria to assess your ability to repay the mortgage, so it’s best to avoid making any definitive decisions based solely on your pre-qualification status. Wait until you’re pre-approved.



A pre-approval represents a conditional commitment by your lender to grant you a mortgage. It’s a much more complex process and carries more weight than your pre-qualification. Your lender will conduct a thorough analysis of your finances and creditworthiness, and further assess whether you meet the requirements to successfully secure the loan you’re seeking. You’ll likely be required to fill out an official mortgage application.  


A pre-approval provides you with a more secure position than a pre-qualification and enables you to be more accurate when it comes to searching for homes within your budget. Your pre-approval also instills confidence knowing financing is in place and allows better leverage with sellers particularly in a competitive marketplace. During the pre-approved period – typically between 90 and 120 days – the interest rate will remain locked in, which is great if you expect rates to increase. And if they decrease, your pre-approval will also be adjusted accordingly.


What’s next? You’re off to the races with a final mortgage approval and realizing your dream of homeownership! 


Have questions about securing a pre-approval? Answers are a call or email away!