Tips to Boost Your Pre-Qualification Amount
Getting pre-qualified is an exciting first step toward buying a home. Your pre-qualification amount provides an estimate of what you might afford, based on your income, savings, and existing debts. If you’d like to improve your numbers and unlock a higher purchase potential, here are some simple and practical tips for various situations.
If You’re Self-Employed
Tip: Show consistent income with well-prepared financial documents. Lenders like to see steady earnings over the past two years. Keeping your bookkeeping organized and working with an accountant to file accurate returns can help your income appear stable, increasing your qualification potential.
If You Have More Than 20% Down
Tip: Use your flexibility to strengthen your application.
With a larger down payment, you can often qualify for more by choosing a slightly shorter amortization or paying off small debts first. It shows strong financial health and can open up more lender options.
If You’re Considering an Alternative Lender
Tip: Ask your broker about lenders that use a lower qualifying rate. Some alternative or “B” lenders don’t apply the higher government stress test rate when calculating affordability. This can increase your purchase power, though it’s important to balance that benefit against potentially higher rates or fees.
If You’re a First-Time Home Buyer
Tip: Take advantage of first-time buyer programs and incentives.
Programs like the RRSP Home Buyers’ Plan, shared-equity programs, or land transfer tax rebates can free up funds for your down payment or closing costs. More available funds mean stronger purchasing power and a smoother approval process.
If You Own Additional Properties
Tip: Review how your rental income and expenses are reported. Lenders assess non-subject (other) properties differently. Ensuring your rental income, expenses, and equity are clearly documented can help your broker present your full financial picture, and in many cases, improve your borrowing capacity.
If You’re Applying with a Co-Applicant
Tip: Combine incomes strategically.
Adding a co-applicant with a steady income and good credit can substantially raise your pre-qualification limit. Even if they carry some debt, the total combined income often results in a higher approval amount.
If You Want to Lock In a Rate for 120 Days
Tip: Secure a 120-day rate hold early.
Getting a rate hold protects you from rising interest rates while you shop for a home. If rates increase, you retain your lower rate, and if they decrease, your broker can typically secure the new one for you. It’s a smart way to protect your affordability window.
If You Want to Improve Your Credit Score
Tip: Focus on minor, consistent improvements.
Pay bills on time, keep your credit card balances below 30% of their limit, and avoid applying for new credit right before a mortgage. A higher credit score can unlock better rates and more flexible qualifying ratios.
If You Want to Reduce Monthly Debts
Tip: Pay down small loans or revolving credit first.
Reducing your monthly obligations, even modestly, can make a big difference. Lower debt means more of your income is available for a mortgage, directly increasing your pre-qualified amount.
If You Have Variable or Additional Income
Tip: Make sure your income is well-documented.
If you earn bonuses, commissions, or freelance income, keep detailed records and deposit income regularly into your account. The more verifiable your income, the more confidently lenders can include it in your qualification.
If You’re Looking at a 30-Year Amortization
Tip: Ask about extended amortization options.
Choosing a 30-year amortization can lower your monthly payments and increase your borrowing capacity. This option is available if you’re a first-time homebuyer or purchasing a newly built home with mortgage insurance, or if you’re putting 20% or more down.
If You’re Thinking About Switching Jobs
Tip: Maintain employment stability before applying.
Lenders prefer a consistent job history. Try to avoid major employment changes right before applying, especially if the new role includes a probation period. Steady income helps you qualify for a higher amount with fewer questions.
If You Have Savings or Investments
Tip: Highlight your assets.
Showing additional savings or investments, even if they aren’t used for your down payment, strengthens your overall profile. It demonstrates financial stability and reassures lenders that you can comfortably handle homeownership costs.
If You’re Working with a Mortgage Broker
Tip: Leverage their expertise.
An experienced broker can present your application in the best possible way and connect you with lenders that match your situation. They know which lenders offer the most flexibility, which can make a big difference in your approval amount.