We want to help you fulfill your goals, where and when it's convenient for you. That’s why RBC has introduced the option to complete a mortgage transaction remotely – from advice to application to funding.We can answer any questions by phone or video, and in provinces where electronic signatures are permitted, we can send you paperwork electronically and get your electronic signature. It’s a simple, convenient and safe way to take care of your mortgage!
Getting Pre-Approved for a Mortgage
As you navigate the home-buying process, it’s important to understand the steps as well as the terms used by mortgage lenders, which are very likely to include pre-qualification and pre-approval.
Pre-qualified or pre-approved — what’s the difference?
Mortgage pre-qualification is generally a quick, simple process. You provide a mortgage lender personal financial information, including your income, debt and assets. Based on your information, the lender will give you a tentative assessment as to how much they’d be willing to lend you toward a home purchase. Pre-qualification can usually be done over the phone or online and often at no cost. A pre-qualification is not a guaranteed loan. With our True House Affordability tool, you'll get a personalized calculation of the purchase price you may be able to afford since we use your credit rating - it only takes a few minutes and won't affect your credit score.
Mortgage pre-approval is a more significant milestone in the process because a lender is actually checking your credit and verifying your financial information. If you’re pre-approved, a lender is making an actual commitment (subject to conditions such as a property valuation) to loan you money. Pre-approval is not necessarily a guarantee that you will receive a specific rate or mortgage from that lender because circumstances may change from the time you get pre-approved until the time you’re ready to make a purchase.
How pre-approval works
Getting a mortgage pre-approval means you’re preparing to take the next step in the home-buying process. Consider working with a mortgage specialist to help guide you through the pre-approval process. Once you have selected one:
- You and your mortgage specialist will discuss your financial strategy and needs, mortgage amount, down payment, purchase price, etc.
- You'll learn about the various available mortgage options (fixed vs. variable rate, interest terms, payment options, amortization, etc.) and discuss which of them best suits your needs.
- With your consent, your mortgage specialist will take an application, which will require you to provide details on such items as employment, income, assets, down payment (if applicable) and liabilities.
- You'll give the lender permission to obtain a credit bureau report.
- Your mortgage specialist will advise you about the documentation (income confirmation, down payment confirmation, etc.) you'll need to supply upon conditional approval of your mortgage. Any conditions must be met for your mortgage to be fully approved.
Pre-approvals are subject to your continued good credit and are usually good for 60, 90 or 120 days depending on the lender.
Why get pre-approved?
- You'll save time house-hunting, seeing only homes you can afford.
- You’ll have a better idea of your monthly payment amounts, as well as how much your down payment will be.
- Real estate agents may serve you better because they know you're serious and ready to buy.
- When you make an offer to purchase, the seller may be more likely to give it serious consideration because you have solid financial backing.
- Your pre-approved status may give you more negotiating power with a seller.
- Some lenders may give you a rate lock so you don’t have to worry about rising interest rates while you look for a new home.
- There's no cost to you and you're not obligated to accept the mortgage.
Get your financial paperwork in order
You are under no obligation by getting pre-approved, but you want to be comfortable with the amount and terms of your pre-approved mortgage. That's why it's essential that you review all your personal expenses and have a good idea of your future expenses before you talk with a mortgage broker or lender about pre-approval. Learn more about knowing how much you can afford.