Should You Get Pre-approved For A Mortgage?

Cynthia Dreger • December 20, 2023

If you’re thinking about buying a property, but you’re not sure where to start, you’ve come to the right place! Let’s discuss how getting pre-approved is one of the first steps in your home buying journey.


Just like you wouldn’t go into a restaurant without knowing if you have enough money to buy your meal, it’s not a good idea to be shopping for a home without an understanding of how much you can afford. You can browse MLS from your couch all you want beforehand, but when you’re ready to start looking at properties with a real estate agent, you need a pre-approval.


Now, as there may be some confusion around exactly what a pre-approval does and doesn’t do, let’s discuss it in detail. First of all, a pre-approval is not magic, and it’s not binding. A pre-approval is not a contract that will guarantee mortgage financing despite changes to your financial situation. Instead, a pre-approval is simply the first look at your overall financial health that will point you in the right direction before you’re ready to apply for a mortgage.


Said in another way, a pre-approval is a map that gives you the plan to secure an actual approval. After going through the pre-approval process, you’ll know how to qualify for a mortgage and at what amount.


When considering your mortgage application, lenders look at your income, credit history, assets vs liabilities, and the property itself. Working through a pre-approval will cover all these areas and will uncover any major obstacles that might be in your way of securing financing.


The best time to secure a pre-approval is as soon as possible; it’s never a bad idea to have a plan. Here are a few of the obstacles that a pre-approval can uncover:


  • You’ve recently changed jobs, and you’re still on probation
  • Your income relies heavily on extra shifts or commissions
  • You’re unaware of factual mistakes or collections on your credit report
  • You don’t have an established credit profile
  • You don’t have enough money saved for a downpayment
  • Additional debt is lowering the amount you qualify for
  • Really anything you don't know that you don't know


Even if you believe you have all your ducks in a row, working through the pre-approval process with an independent mortgage professional will ensure you have the best chance of securing a final approval. As a point of clarity, a pre-approval is not the same as a pre-qualification. This is not typing a few things into a website, calculating some numbers, and thinking you’re all set. A pre-approval includes providing your financial information, looking at your credit report, discussing a plan for securing mortgage financing with a mortgage professional, and even submitting documents ahead of time.


Mortgage financing can be a daunting process; it doesn’t have to be. Having a plan in place and doing as much as you can beforehand is essential to ensuring a smooth home buying experience. As there is no cost for getting a mortgage pre-approval, there is absolutely no risk. Consider starting the process right now!


If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

CYNTHIA DREGER

Mortgages Aren’t One-Size-Fits-All

By Cynthia Dreger • August 13, 2025
Why the Cheapest Mortgage Isn’t Always the Smartest Move Some things are fine to buy on the cheap. Generic cereal? Sure. Basic airline seat? No problem. A car with roll-down windows? If it gets you where you're going, great. But when it comes to choosing a mortgage? That’s not the time to cut corners. A “no-frills” mortgage might sound appealing with its rock-bottom interest rate, but what’s stripped away to get you that rate can end up costing you far more in the long run. These mortgages often come with severe limitations—restrictions that could hit your wallet hard if life throws you a curveball. Let’s break it down. A typical no-frills mortgage might offer a slightly lower interest rate—maybe 0.10% to 0.20% less. That could save you a few hundred dollars over a few years. But that small upfront saving comes at the cost of flexibility: Breaking your mortgage early? Expect a massive penalty. Want to make extra payments? Often not allowed—or severely restricted. Need to move and take your mortgage with you? Not likely. Thinking about refinancing? Good luck doing that without a financial hit. Most people don’t plan on breaking their mortgage early—but roughly two-thirds of Canadians do, often due to job changes, separations, relocations, or expanding families. That’s why flexibility matters. So why do lenders even offer no-frills mortgages? Because they know the stats. And they know many borrowers chase the lowest rate without asking what’s behind it. Some banks count on that. Their job is to maximize profits. Ours? To help you make an informed, strategic choice. As independent mortgage professionals, we work for you—not a single lender. That means we can compare multiple products from various financial institutions to find the one that actually suits your goals and protects your long-term financial health. Bottom line: Don’t let a shiny low rate distract you from what really matters. A mortgage should fit your life—not the other way around. Have questions? Want to look at your options? I’d be happy to help. Let’s chat.

What is a Cashback Mortgage?

By Cynthia Dreger • August 6, 2025
As the name implies, a cashback mortgage is similar to a standard mortgage, except that you receive a lump sum of cash upon closing. This lump sum will either be a fixed amount of money or a percentage of the mortgage amount, usually between 1-7%, depending on the mortgage term selected. How you use the cash is entirely up to you. Some of the most common reasons to secure a cashback mortgage are to: Cover closing costs. Buy new furniture. Renovate your property. Supplement cashflow. Consolidate higher-interest debt. Really, you can use the cash for anything you like. It’s tax-free and paid to you directly once the mortgage closes. Understanding the cost of a cashback mortgage. Now, while it might appear like a cashback mortgage is a great way to get some free money, it’s not. Banks aren’t altruistic; they’re in the business of making money by lending money. Securing a mortgage that provides you with cash back at closing will cost you a higher interest rate over your mortgage term. A cashback mortgage is like getting a fixed loan rolled into your mortgage. Your interest rate is increased to cover the additional funds being lent. Now, with so many different cashback options available and with interest rates constantly changing, it's nearly impossible to run through specific calculations on a simple article to outline how much more you’d pay over the term. So, if you'd like to identify the true cost of securing a cashback mortgage, the best place to start is to discuss your financial situation with an independent mortgage professional. When you work with an independent mortgage professional instead of a single bank, you receive unbiased advice, more financing options, and a clear picture of the cost associated with securing a mortgage. Getting cashback at closing is a mortgage feature that makes the bank more money at your expense. This isn’t necessarily a bad thing; the key is to be informed of the costs involved so you can make a good decision. Eligibility for a cashback mortgage. Simply put, a cashback mortgage isn’t for everyone. This is a mortgage product that has tougher qualifications than standard mortgage financing. Any lender willing to offer a cashback mortgage will want to see that you have stable employment, a fabulous credit score, and healthy debt service ratios. If your mortgage application is in any way “unique,” the chances of qualifying for a cashback mortgage are pretty slim. Breaking your mortgage term early. In addition to paying a higher interest rate to cover the cost of receiving the cashback at closing, a cashback mortgage also limits your options down the line. If your life circumstances change and you need to break your mortgage mid-term, depending on the conditions set out in your mortgage contract, you’ll most likely be required to either pay all of the cashback received or at least a portion, depending on how long you’ve had the mortgage. As all cashback mortgages are tied to fixed-rate terms, so in addition to repaying the cashback, you’d also be required to pay the interest rate differential penalty; or 3 months interest, whichever is greater for breaking your mortgage term early. Sufficed to say, should you need to pay out your mortgage early, breaking your cashback mortgage will be costly. Certainly, this is something to consider when assessing the suitability of this mortgage product. Get independent mortgage advice. Understanding the intricacies of mortgage financing can be difficult at the best of times. With all the different terms, rates, and mortgage products available, it’s hard to know which mortgage is best for you. So while a mortgage that offers a cash incentive upon closing might initially seem like an attractive offer, make sure you seek out the guidance of an independent mortgage professional to help you navigate the costs associated with a cashback mortgage. While it might be a great option for you, there might be other mortgage options that better suit your needs. It's worth a conversation for sure! If you’d like to discuss what a cashback mortgage or any other mortgage product would look like for you, please get in touch. It would be a pleasure to work with you.