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A mortgage pre-qualification is an informal, unverified estimate of how much a borrower might be able to afford, based on self-reported income, debts, and assets rather than documented proof. It is a starting point for house-hunting, not a lender commitment.
A pre-qualification is typically a quick conversation or online estimate: a lender or broker runs rough GDS and TDS numbers using whatever income and debt figures the borrower provides, without pulling credit or verifying documents. It gives a general sense of price range early in the process, before a borrower has started seriously shopping.
Because nothing is verified, a pre-qualification can be materially different from what a lender will actually approve once real documents and a credit report are involved. Most borrowers move from pre-qualification to a pre-approval once they are seriously house-hunting, since a pre-approval carries more weight with a seller and often locks in a rate.
Self-reported, not verified: figures come from the borrower, with no credit check or documentation review at this stage.
An early estimate only: useful for setting a realistic price range before house-hunting begins, but it carries little weight with a seller.
No rate hold attached: unlike a pre-approval, a pre-qualification typically does not lock in an interest rate.
A step, not a commitment: mortgage agents, submortgage brokers, mortgage associates, and courtiers hypothécaires generally treat pre-qualification as the first conversation, followed by a documented pre-approval.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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