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How to get approved for a mortgage in Canada

How to get approved for a mortgage in 6 steps or less

How to get approved for a mortgage in 6 steps or less

As a prospective homeowner in Canada, you’re probably thinking about how to get approved for a mortgage. On the surface, the application and process seem self-explanatory and may even seem like it’s an application that you can do whenever you feel like it. While it doesn’t hurt to apply, taking the time to understand all the parts in the approval process can help you prepare for what banks and lenders expect from you.

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How to get approved for a mortgage in Canada

The mortgage approval process

The approval process can be condensed into three main stages, each with varying sub-steps. The first stage is the first call, which is referred to as the discovery call. The mortgage preapproval stage comes in second and is where your financial background is examined, which includes everything from your credit score to your assets. The final stage, which is known as the approval stage is when all your documents are finalized and, when the funds needed for the house that you have your eyes on will be made available to you.

Discovery call

Once you have decided that you want to acquire a piece of property, the first thing to do is to contact a mortgage broker. This conversation will help the broker understand your financial situation by looking into your credit history, income, and credit score. Having a mortgage broker working with you will also help you feel empowered if there are any challenges or questions along the way.


When your mortgage broker has a better understanding of your finances and your goals for your home, you’ll move forward with the application. You can actually skip the discovery call entirely and move straight into the application step because it can be done with or without a broker. However, working with a mortgage broker can give you more personalized lending options based on your finances.


You can also think of this stage as the recommendation for approval. If you meet all the qualifications, you could get a contract that guarantees you a certain term and interest rate. You’ll also receive an estimate of the size of mortgage that can be advanced for your purchase, allowing you to have a better idea of the budget you can work with as you shop for new property.


After the preapproval, mortgage lenders will assess your income, credit score, down payment, and the property in accordance with their qualification guidelines (this may include the mortgage stress test). All four factors have to meet their standard in order to get a loan from them. This step usually takes about a week.


After your application passes the lender’s qualification, they will respond with their commitment to the deal. The lender may ask for more documents to verify some information, so the quicker you get it to them, the quicker this step will also pass.  The commitment from the lender will usually have an expiration period.

Closing stages

The closing stage comes in two parts, the pre-closing and the funding. The pre-closing stage involves your lawyer and the lender working together to fully complete the purchase. The title will go to the buyer, and the offer to purchase will be fully executed. There will be lots of documents to sign. It all gets wrapped up into the final closing stage where you’ll receive the keys to your new home.

Other tips on how to qualify for a mortgage

The following tips are not necessarily part of the approval process, but it does help it go smoother while increasing your chances of getting approved for your home loan.

Maintain a good credit score

In Canada, the minimum credit score to get a mortgage lies around 660 points. The higher your score, not only increases the chances of approval, but also increases the chances of you getting a better mortgage rate. You can continue keeping a good credit score or even raise your credit score by paying off as many of your debts as possible. One way that people pay down multiple of their debts is with a home equity loan.

Stabilize your income

Banks and certain lenders will look into your income during the application process. They want to verify that you will be able to repay the mortgage without putting too much strain on your finances. For some lenders, they may expect you to have a certain income. If you are self-employed, there will be more steps in the application process as you will have to prove that you are making the income you state. Regardless, you’ll want to make sure that there are no changes in your income during the home buying process.

Offer a larger down payment

Saving up for a larger down payment takes more time, but it can be really helpful in the long run. The safest amount of money to prepare for the down payment is at least 20% of the price. Taking Canada’s housing market into account, 20% is a considerably large amount of money, so not many Canadians can provide it straight from their pockets. However, one way home buyers can decrease their monthly mortgage payments is by offering larger down payments, and home buyers who already own property can do so by looking into a home equity loan.

Alternative ways to get approved

Sometimes the criteria that the banks give is too high of an expectation for Canadians. Fortunately, there are other ways to get approved for a mortgage; one of them is to apply for mortgages with alternative mortgage lenders, like Alpine Credits.

Homeowners who apply with Alpine Credits don’t have to worry about all the steps that applying for a traditional mortgage asks. Unlike applying for a loan at the bank, Alpine Credits helps you access the equity in your property as a loan, which can have very high value given the current housing market. You can use that loan towards the down payment on the new house or to consolidate your debt to make your application look more ideal to the banks.

As long as you have paid for at least 25% of the mortgage, you could be eligible for a loan of up to 80% or your home equity loan. The process much quicker and you can get approved overnight. Contact one of our Financial Solutions Specialists, and they can answer any question you have regarding home equity loans.

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