What is a pre-approved mortgage?

A pre-approved mortgage provides prospective home buyers with a strong sense of the maximum amount of mortgage that they qualify for, along with an interest rate guarantee from a lender for a specified period of time (usually 90 to 120 days). It should be one of the first steps a home buyer should take when looking for a home or property.

A pre-approval does not absolutely guarantee that you'll receive the funds (as the final amount may be subject to conditions), but it's a very good indicator of the maximum amount you should consider when looking to purchase.

The pre-approval process requires that you provide financial and credit score information in order to determine what size of loan you're eligible for, based on lender and government requirements and regulations. Your down payment will be also be factored into the amount.