The Importance of a Mortgage Pre-Approval in Today's World

A fully underwritten mortgage pre-approval is more important than ever since the Government of Canada's latest round of mortgage rule changes took place in October, 2016.

For prospective homebuyers with less than a 20% down payment, your mortgage will need to be insured.  Due to the government's stress test, the average purchaser may now qualify for up to a 20% reduction in purchase price.  If you qualified for a $300,000 purchase price before the rule changes, in many cases your maximum purchase price may now be $240,000.  There are big benefits to having multiple lender options when looking to maximize your purchase price.

If you have a 20% down payment or more, it is still in your best interest to get a fully underwritten mortgage pre-approval with multiple lender options.  Things like cost of funds, flexible terms and amortizations, pre-payment and penalty policies all vary greatly between lenders and are key to getting your best, lowest cost mortgage with comfortable cash flow.

Here are some tips if you are considering purchasing a home this year:

  1. Meet with a mortgage professional you trust to begin the pre-approval process as early as possible.
  2. Confirm what you qualify for now and if needed, get help to put a plan in place to get you where you want to be.
  3. Your income should be confirmed with all documents requested upfront to ensure your maximum purchase price and lowest cost mortgage options.
  4. Your credit should be checked and you should be advised if there is anything you can do before you buy to increase your credit score.
  5. Your current debt should be reviewed and strategies implemented to restructure or reduce debt, if required.
  6. Your source of down payment and closing costs should be reviewed and advice given on options to reduce mortgage costs and increase cash flow.
  7. All mortgage pre-approvals are not created equal.  If you are not getting the answers you want and need, get a second opinion.

Ready to start?  For a free, no obligation consultation to discuss your mortgage pre-approval options, please contact one of our trusted and knowledgeable Manitoba Mortgage Brokers here at One Link by phone at 204-954-7620 or email at  We are here to help!