Pre-approval: what it actually guarantees

Before you visit anything, know what you can actually buy.

A pre-approval is a lender reviewing your income, your debts and your credit, and telling you the amount they would be prepared to finance. It gives you a real budget and, in most cases, a rate held for a set period.

What it gets you

A budget based on numbers, not a guess. You stop viewing properties out of reach, and you stop ruling out ones that are within reach.

A protected rate. Most lenders hold the rate for a set period. If rates rise while you are searching, you keep yours. If they fall, we check again.

Weight behind your offer. In a market where several buyers compete on the same property, a seller takes seriously the one whose financing is already underway.

The important nuance: a pre-approval is not a final approval. It rests on the information provided upfront and remains conditional on full verification of your documents and on the appraisal of the property you actually buy. Never sign an offer without a financing condition on the strength of a pre-approval alone.

What can undo a pre-approval

— Changing jobs or going self-employed between pre-approval and purchase.

— Financing a car or furniture while you are searching.

— Having your credit checked repeatedly at several institutions.

— Moving your down payment into an account whose source cannot be traced.

— Buying a property that appraises below the price paid, or a condo whose syndicate is in poor financial health.

In short: once pre-approved, do not change anything in your financial situation without telling me. A purchase that seems harmless can tip your ratios.