Frequently asked questions

Both assessments can give you a sense of your price range and how much home you may be able to afford. Pre-qualification is a useful way for first-time homebuyers to assess whether they’re ready to buy a home, and can be useful in financial planning and goal-setting. A preapproval letter is highly recommended when you make an offer on a home, and demonstrates that you can follow through on the financial commitment you’re making. Preapproval tells sellers you are a serious buyer, and that you can pay what you’re offering.

To get pre-approved for a mortgage, you should submit an application through a mortgage lender or bank, like Royal Bank of Canada. You can typically submit your preapproval application online. The application will ask for details about your financial situation, such as employment, income, assets, debts, and down payment. The lender will then run a check of your credit details, and provide you with a conditional mortgage approval that typically lasts for 60, 90, or 120 days, depending on the lender.

Mortgage preapproval requires a formal credit bureau report (or a “hard credit check”), so the inquiry may temporarily affect your credit scores. This is because hard credit checks are typically associated with new lines of credit. This credit check for preapproval typically only impacts your score by a few points, but too many credit checks over a short period of time may have a more substantial impact.

The preapproval process conducts a comprehensive investigation into your finances, including your income, debt and debt payments, assets, your credit score, and more. Lenders want to see consistency, so switching jobs, making big purchases, or signing up for new credit cards could bring up red flags. If you’re looking to buy a home in two years, start improving your financial wellness now with a financial planner and a well thought out savings plan.

The preapproval process itself can take anywhere from a few hours to several days, but gathering documents can be time consuming and you may need to book an appointment in advance. Some lenders may take up to two weeks to come back with a preapproval amount and letter. An RBC mortgage specialist can help get you organized and offer a clear gameplan in the homebuying process, from gathering documents to making an offer and closing the deal. Pre-qualification can be a good way to prepare for preapproval, and you can often get results within minutes using an online form or phone number.

A mortgage preapproval is typically good for 60, 90 or 120 days, depending on the lender. After that time, you’ll need to reapply for preapproval with your lender.

Pre-approval is highly recommended before making an offer on a home, so it should be your first step when you’re ready to get serious about homebuying. Consider getting pre-approved before connecting with a real estate agent to begin touring homes. This way, you’ll know exactly what you can afford, and with a preapproval letter in-hand, you’ll be ready to move quickly on a home you love.