6 Things You Need to Be Preapproved for a Mortgage in Canada

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Buying a home in Canada? Then one of the smartest early steps you can take is getting preapproved for a mortgage. It’s like getting a green light from your lender saying, “You’re good to go—up to this amount.” But what does that really mean? And what exactly do lenders look for before handing out that preapproval?

In this guide, we’ll walk you through everything you need to know—from the documents you need to the difference between prequalification and preapproval. Whether you’re a first-time homebuyer or looking to upgrade, this article will give you the clarity and confidence to move forward.

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What’s the Difference Between Prequalification and Preapproval?

Before we get into the nitty-gritty of what documents you’ll need, let’s clear up some confusion. People often use prequalification and preapproval interchangeably—but they’re not the same.

Prequalification is more like a rough estimate. Based on some basic financial info you provide—like income, debt, and credit—it gives you a ballpark idea of how much home you might afford. It’s quick, easy, and doesn’t require document submission or a credit check.

Preapproval, on the other hand, is a formal commitment. It’s when a lender reviews your actual financial documents, checks your credit, and conditionally agrees to lend you a certain amount, usually locking in a rate for 90 to 120 days.

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Why Getting Preapproved Matters

You don’t want to start house hunting with an unrealistic budget or lose out on your dream home because financing falls through. Preapproval solves both these problems.

Here’s what preapproval does for you:

• Lets you know your budget before you shop
• Increases your negotiating power with sellers
• Locks in your mortgage rate for a set time (often up to 120 days)
• Helps you act quickly in competitive markets

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6 Things You’ll Need for Mortgage Preapproval

Now let’s get into the meat of it. What do Canadian lenders actually look at before they hand you a preapproval? Here’s what you’ll need to show.

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1. Government-Issued ID (Proof of Identity)

It seems basic, but confirming your identity is the first step. You’ll typically be asked for a driver’s license, passport, or permanent resident card.

Why it matters: Lenders need to verify that you are who you say you are, especially to prevent identity fraud.

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2. Employment Verification

Your job status is one of the biggest factors lenders assess. Expect to provide:

• A letter of employment (includes your position, income, and how long you’ve worked there)
• Recent pay stubs (usually the last two)
• If self-employed: Your last two years of NOAs (Notices of Assessment) from the CRA, and possibly business financials.

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3. Proof of Income

Beyond verifying your job, lenders want to see how much you’re earning. You might need:

• T4s or recent income tax returns
• Bank statements showing direct deposits
• If you receive rental income, commission, bonuses, or pension—include that too.

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4. Proof of Assets

Do you have other forms of wealth that could serve as backup? This includes:

• Savings accounts
• RRSPs or TFSAs
• Investments or real estate
• Vehicles or valuables

Lenders want to know you’ve got backup resources in case something unexpected happens—like job loss or an emergency expense.

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5. Down Payment Information

Where is your down payment coming from?

You’ll need to show:

• Bank statements for the last 90 days
• A gift letter, if you’re getting help from family (very common for first-time buyers)

💡 Most lenders also want to see you’ve got enough saved for closing costs—which can add up to 1.5–4% of your home price.

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6. Your Credit Score and Credit Report

This is a big one.

Your credit score is a snapshot of your financial trustworthiness. A score above 680 is considered good and typically qualifies for the best mortgage rates. But even if your score is lower, you might still qualify—though possibly at a higher rate or with more conditions.

Lenders check your:

• Total debt levels
• Payment history
• Credit card balances
• Missed or late payments

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How Long Is Preapproval Valid?

Most mortgage preapprovals are valid for 90 to 120 days. That means you can shop for a home during that period with confidence that your interest rate is locked in—even if market rates go up.

Once that window expires, you’ll need to update your documents and reapply.

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What Happens After Preapproval?

Once you’re preapproved, you can go house hunting! When you make an offer on a home and it’s accepted, your mortgage lender will finalize the application. They’ll review:

• The appraised value of the property
• Title and legal documents
• Your final financial status (to make sure nothing’s changed)

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Final Thoughts: Don’t Skip Preapproval—It’s Your Buying Power Badge

Getting preapproved is more than just a formality. It’s your proof to sellers, real estate agents, and yourself that you’re ready to buy. It gives you a competitive edge and financial clarity—so you’re not guessing what you can afford.

At Mortgage.Expert, we make the preapproval process simple, fast, and fully digital. Whether you’re just getting started or ready to make an offer, we’re here to help you secure the right mortgage with confidence.