Get mortgage-ready

Documents gathered, down payment sourced, credit protected, pre-approval understood.

The idea

Three things get called "pre-approval" and only one of them means anything.

A pre-qualification is a conversation. You tell someone your income, they tell you a number. Nothing is verified. It's worth roughly what it costs, which is nothing.

A pre-approval means a lender has looked at your documents, pulled your credit, and committed — subject to conditions — to lending a specific amount, usually with a rate held for a set window. This is the one that matters, and it's what a seller's agent means when they ask whether you're pre-approved.

Final approval comes after you have an actual property under contract. The lender is approving the house as much as you at that point, and this is where an appraisal that comes in low can undo a deal. A pre-approval is not a guarantee of final approval. Nothing you can hold in week three is.

Gather the documents once. Almost all the friction in getting pre-approved is paperwork you don't have handy. Do it once now, keep it in one folder, and every subsequent conversation gets easier. Roughly: identification, income proof, down payment proof, and a picture of your debts. What "income proof" means depends entirely on how you earn — a salaried employee needs a letter and a couple of pay stubs; someone self-employed is looking at two years of full tax returns and notices of assessment. If you're self-employed, commission-based, or newly in a role, start this week rather than next month.

Your down payment needs a paper trail. This surprises people. It isn't enough to have the money — a lender needs to see where it came from, typically across the preceding ninety days. Money that appears in your account as a lump sum with no explanation will be asked about. Gifted funds from family are entirely normal and entirely allowed, and they need a signed gift letter confirming it isn't a loan. Start the paper trail now so the money has history by the time anyone looks at it.

The registered accounts. An FHSA lets you contribute up to $8,000 a year to a lifetime $40,000, and qualifying withdrawals for a first home come out tax-free. The Home Buyers' Plan lets you withdraw up to $60,000 from an RRSP, repayable over 15 years beginning the fifth year after the year of a first withdrawal. One mechanical detail that catches people: RRSP contributions generally must sit for 89 days before they can be withdrawn under the plan, so money moved in at the last minute may not be available when you need it.

Protect your credit for ninety days. 600 is the usual minimum for an insured mortgage, and better scores get better rates. Between pre-approval and possession, four things cause the most damage: financing a vehicle, opening a new credit card, closing an old one — length of history counts — and missing any payment on anything. A lender can and often does re-check your credit before funding. People have lost homes buying furniture for them.

Broker or bank. A broker shops multiple lenders; a bank offers its own products and may price sharply for an existing customer. Neither is universally better. What matters more is asking the same questions of everyone.

What to actually ask — and note that much of the standard advice floating around is written for American mortgages and doesn't translate. The questions worth asking here: fixed or variable, and why for me? What's the term, and what's the amortization? What are the prepayment privileges? How is the penalty calculated if I break early — and specifically, how is an interest rate differential worked out? Is the mortgage portable if I move? Is it a collateral charge, and what does that mean if I want to switch lenders at renewal? What fees are there? How long is the rate held?

The penalty question is the one people skip and regret. Breaking a mortgage early is common — job changes, relationships, upsizing — and the difference between two lenders' penalty calculations can run into thousands.

If your situation isn't standard. Self-employed, newly landed with a thin credit file, commission-heavy income, carrying student debt, or working with a gifted down payment — none of these are obstacles, and all of them are ordinary. They change what you document and how early you start, not whether you qualify. The mistake is assuming the standard timeline applies and discovering in week nine that it didn't.

Edmonton specifics

Alberta credit unions and local independent brokers are genuine alternatives to the big banks here, and they're worth including in your comparison rather than defaulting to whoever holds your chequing account. Local lenders sometimes have more flexibility on non-standard income, and credit union products can differ meaningfully from bank ones on prepayment terms.

One difference worth asking about directly: the stress test binds federally regulated lenders. Provincially regulated credit unions sit outside that supervision and aren't required to apply the minimum qualifying rate, though many apply a comparable standard of their own. Don't assume it either way — ask the credit union what rate they'd actually qualify you at, because it can change what you can buy.

What doesn't change anywhere: the minimum down payment tiers and the default insurance rules. Those are federal.

The worksheet

Three this week. The first is the one to start today.

A. Mortgage document checklist

Grouped by category, and it adapts to the income type and down payment sources you entered in Week 2 — you won't be shown documents that don't apply to you.

- have_it — Got it? - where_from — Where does this come from? CRA My Account, your employer's HR, your bank's statements page. - date_obtained — When did you get it? Lenders want recent. Statements older than a couple of months usually need refreshing.

A progress ring shows how close the folder is to complete.

B. Down payment plan

Add a row per source — savings, FHSA, RRSP under the Home Buyers' Plan, TFSA, a gift.

- source, amount, available_date — When can you actually access it? Not the same as having it. Registered accounts and gifts both have timing. - paper_trail_ready — Can you show where it came from over the last 90 days?

You'll get back your total available, the gap against what Week 2 said you need, and — if you're short — how many months of a given monthly saving closes it. A specific date is much easier to work toward than a vague shortfall.

C. Lender comparison

Three lenders side by side, same questions down the left. Fill one column per conversation; the differences become obvious in a way they never do from memory.

Rows: name and contact · rate quoted · fixed or variable · term · amortization · rate hold expiry · prepayment privileges · how the penalty is calculated · portable · collateral charge · fees · pre-approval issued · notes.

Rate is one row of thirteen. That's deliberate. A rate that's a fraction lower with a punishing penalty structure and no prepayment privileges is not the better mortgage.

What this unlocks

A printable one-page document list to take to the appointment, and a comparison sheet that makes the decision on evidence rather than on whoever was friendliest.

Talk to a professional

This is the natural point to speak with a mortgage broker or lender — you have the questions, the documents, and your own numbers from Week 2.

Bring the document checklist and the lender comparison sheet. Ask everything on it, including the awkward penalty question. If something in the answer doesn't make sense, stop and ask again. Nobody has ever been thought less of for asking how their own mortgage works.

Go deeper: read the full article on this →

The information in this course is general education, not financial, mortgage, legal, tax, insurance or real estate advice. Rules, costs and eligibility change and vary by situation. Talk to a qualified professional about your own circumstances.