Pre-Qualify for a Mortgage in Minutes

So you've started house hunting, but what can you afford? Find out and hold the rate for up to 120 days. It's FREE and no obligation.

A mortgage Pre-Approval is an important first step in getting a mortgage, for two reasons:

  • A pre-approval gives you a good idea of what mortgage size you can afford, providing the confidence you need to make realistic (and exciting) decisions as you look for a home or vacation property.
  • Your pre-approval will hold your lowest rate (that you qualify for) for up to 120 days, protecting you from any sudden rate increases.

At True North Mortgage our Pre-Approvals are:

  • FREE, no obligation, and stress-free.
  • Kept on secure servers for your privacy.
  • Guaranteed to be the lowest interest rate for 120 Days with certain lenders.
  • Fast and easy — our short form takes only 9 minutes to complete.

We'll work with you to create a pre-approval at the best rate and terms for your situation. Your mortgage pre-approval is based on your accurate information and the supporting documentation provided by you (we can help walk you through this process). Then it's our job is to shop the mortgage lenders on your behalf, and hold the rate for up to 120 days, depending on the lender. Our True North Mortgage Brokers are highly-trained, but also real people here to represent you, our client, in getting the best mortgage fit possible. Getting a pre-approval and holding your lowest-rate for a short while can help take the stress out of house-hunting.

The six factors that count the most when lenders are deciding whether you qualify for a mortgage loan:

  • Your income
  • Your debts
  • Your employment history
  • Your credit history
  • Your proof of identity
  • Your property value

We'll help you assess and understand how a lender will look at your loan application, and what they look for in terms of a strong application.

A strong loan application will have these features:

  • A housing expense ratio no greater than 39% (now optional, but the lower the ratio, the better).
  • A debt-to-income ratio no greater than 44% (the lower the ratio, the better).
  • The home buyer has steady income (ideally, the same job for two years or longer).
  • The home buyer has good credit (bills have been paid on time).
  • The house is worth the price the buyer is paying.

Your Income

One of the first questions a lender will consider is how much of your total income you'll be spending on housing. This information helps the lender decide whether you can comfortably afford a home. If the house payment represents a larger portion of your income, you're more likely to have trouble making these house payments because of other potential expenses (such as a car, furniture, and home maintenance or upgrades). On the other hand, if the house payment is a smaller portion of your income, the chances are better that you can truly afford the house over the long term.

When you're applying for a loan, the lender will look at your 'gross income,' which is the money you earn before taxes, including overtime, commissions, dividends and any other sources. You must be able to show a steady history for these sources. For example, many lenders will count income from a part-time or seasonal job, as long as you can show that you've had that job for at least two years.

Another important consideration for the lender is to compare your current housing expenses to the new expenses you'll have if you buy a home. The smaller the increase, the stronger your application looks.

More information on why Income Matters

Your Debts

In addition to your income, a lender will look at your debts owing. Your debts include your house payment, and other loans (such as car, credit lines, charge cards, and child support) that you may make each month.

If you’re overloaded with debt, we can help you consider whether taking equity from your home to consolidate your debts would be a viable, cost saving option.

Learn more about your Refinancing Options

Your Employment History

You don't need to be wealthy to qualify for a mortgage, but a history of steady employment in any occupation helps. Lenders are more likely to lend money to people who have worked for several years at the same job, or at the same type of job. However, if you've only been in your current job a short while, this won't necessarily stop you from getting the loan, as long as you've had regular income over the last year.

The lender will check your employment, usually by asking you for a letter from your employer which is signed and states how long you have been on the job and how much money you earn. If you're self-employed, or if you've been at your job less than two years, the lender may ask you for additional information (such as federal income tax statements) concerning your income and work history.

A lender considers these questions when reviewing your loan application:

  • Have you been at the same job for at least two years?
  • Have you been in the same occupation for at least two years?
  • Have you had gaps in your income over the last two years?
  • How long do you expect to stay in your current job?
  • Is the co-borrower (if any) employed?
  • If either you or a co-borrower suddenly becomes unemployed, how long would you be able to make your mortgage payments?

Your Credit History

Good credit is very important in qualifying for a loan. In addition to your ability to pay (as indicated by your debts and income), a mortgage lender will look at your willingness to pay. This will be judged by your credit record — that is, how well you've paid your loans and other debts in the past.

When you apply for a loan, the lender will order a credit report for you. It's also a good idea for you to order a copy of your credit report before you apply. It will show your record of payments on loans, charge cards and other similar debts. If you've never had a loan or a charge card, you can show that you have a good record of payment for utility bills and rent.

Your Property's Value

When you choose a home, the lender will want to know that the house is worth the price you plan to pay. In fact, the loan amount that the lender approves for you will be based on the value of the property. The value of the property is a lender's best assurance that they can recover the money they lend you, even if you stop making mortgage payments. If you stop making payments, the lender has the right to sell your home to pay off the loan — a process called "foreclosure." The lender wants to know that the property could be sold at a price that's worth the loan amount.

If you decide to sell your home before you've finished paying off your mortgage loan, you'll want a price that allows you to pay back the loan balance (and perhaps make a profit as well). That's why it's important to have a professional appraisal of the value of your home.

Your Proof of Identity

Identity theft is a growing problem in Canada for both individuals and for lenders. To make sure no one is falsely using your identity to borrow money for a home, True North Mortgage will ask to see your photo identification. We may also ask you some questions about your credit history to confirm the information that's on record at the credit bureaus.