Pre-Approval or Pre-Qualification? What You Need to Know
Pre-approval is a more detailed process. Buyers must provide proof of their financial details, such as:
Bank statements
Pay stubs
Savings and investment records
The lender reviews these documents to determine whether the buyer can actually afford a mortgage. Sometimes, the pre-approval process reveals that the buyer’s initial answers during pre-qualification were incorrect, filtering out buyers who wouldn’t qualify for a loan.
A Guide to Lenders Mortgage Insurance in Canada
Lenders Mortgage Insurance (LMI) is an important factor for first-time home buyers and families purchasing a home with less than a 20% down payment. This insurance protects the lender if the borrower defaults, with costs ranging from 0.6% to 4.5% of the mortgage amount. For many families, LMI can make homeownership more accessible by allowing a lower upfront investment. Understanding how LMI works, when it’s required, and how to minimize costs can help first-time buyers make informed financial decisions and secure the right home for their needs.