The Pre-Approval Process

When someone reaches out to me, the first thing I do is send out my online application so I can gather their basic information and then schedule a “discovery call” to get to know them a bit better and ask a few questions such as:

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What are their goals?

What is their timeline?

Do they have a property in mind already?

How do they receive income?

What are their monthly expenses?

How do they feel about their credit?

Do they have a down payment saved?

 

At the end of the discovery call we will know whether there are things that need to be worked on before moving forward and I will help put a plan in place to get them where they need to be, or if it sounds like we are ready to continue with the process I will send a request for documents to confirm income and down payment.

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I also send out my client engagement letter at this point, which outlines our relationship as client and broker and gives me authorization to pull their credit report.

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This step is very important as it confirms the liabilities, which are monthly expenses like credit card payments, car loans, lines of credit, student loans, etc… which I need to be precise with in order to keep within debt servicing ratios which are set by the default insurers (CMHC, Sagen & Canada Guaranty).

This is your income compared to your expenses.

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At this point I am able to confidently give you a budget based on a fully unwritten file. It is very important not to change anything about the snapshot in time in which I did this in order for your pre-approval to be valid. This means, not changing jobs or becoming self employed or adding any new debts and expenses.

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Of course, the final decision for approval ultimately comes from the lender we submit the application to and although it's possible to get pre-approved by a lender, this is usually just a rate hold and the underwriters do not actually look at the documents until the file is live.