Most buyers treat a pre-approval as the finish line of the money conversation. It is closer to the starting line. The number a lender gives you is the most they are willing to put at risk, which is not the same as the most you should spend.

Start with the monthly number

Before you look at a single listing, decide what you want your housing cost to be each month, including property tax, insurance and, for a condo, the maintenance fee. Work backwards from that into a purchase price. Nine times out of ten it lands below the pre-approval, and that gap is your breathing room.

Rate holds and what they protect

A pre-approval usually comes with a rate hold of 90 to 120 days. If rates rise, you keep the lower one. If they fall, you get the lower one. That is why it is worth getting the paperwork done early, even if you are months away from making an offer.

The best offers I see are from buyers who know their number before they fall in love with a house.

Three things to bring to our first meeting

  • Your pre-approval letter and the rate hold expiry
  • A rough monthly budget, including the costs that are not the mortgage
  • The neighbourhoods you keep coming back to, and why

From there we can build a search that fits, rather than one that stretches.