Importance of a PreApproval
There’s a moment I see all the time in this business. A buyer walks into an open house “just to look,” falls completely in love with the place, and by supper time they’re talking about writing an offer.
It’s exciting. It’s emotional. And sometimes, it’s exactly where people get themselves into trouble.
I can tell you one of the smartest things a buyer can do before house hunting is get a proper mortgage pre-approval in place. Not the casual “I think we qualify for around this amount” conversation. I mean an actual reviewed pre-approval with income, down payment, credit, and monthly budget all looked at carefully.
Because once you’re standing in someone else’s dream kitchen imagining where your coffee maker will go, logic has a funny way of leaving the building.
A pre-approval does a few very important things.
First, it tells you what a lender is likely willing to lend you. That sounds obvious, but many buyers are shocked to discover that what they want to spend and what the bank is comfortable approving are two very different numbers.
Second, it helps you shop with confidence. In competitive markets, sellers take pre-approved buyers much more seriously. A seller who has two similar offers in front of them will almost always feel more comfortable with the buyer who already has financing lined up.
But here’s the part I think matters even more — a pre-approval gives you the chance to figure out what home ownership will actually feel like every month.
And this is where many people make a mistake.
They focus only on the mortgage payment.
The mortgage payment is important, of course, but it’s only one piece of the puzzle. Before writing an offer, buyers should sit down and calculate the total monthly cost of the home.
That means including:
- Mortgage payment
- Property taxes
- City utilities
- Home insurance
- Strata fees, if applicable
- Heating costs
- Potential maintenance expenses
Because the difference between “technically approved” and “comfortably affordable” can be huge.
Let’s use a simple example.
Suppose you purchase a home for $650,000 with a reasonable down payment. At current interest rates, your mortgage payment might land somewhere around $3,100 per month.
At first glance, that may seem manageable.
But then we add:
- Property taxes: $350/month
- Utilities: $200/month
- Home insurance: $140/month
- Strata fees: $450/month
Suddenly the true monthly housing cost is closer to $4,240 per month.
That’s a very different conversation.
And if you haven’t done those calculations ahead of time, you may find yourself house-rich and lifestyle-poor after possession day.
I often tell clients this: your home should support your life, not consume it.
You still want room for groceries, kids’ sports, travel, retirement savings, and the occasional dinner out where nobody has to do dishes afterward.
Another benefit of getting pre-approved early is discovering issues before they become emergencies. Sometimes we uncover small credit issues, missing documents, or income challenges that can be fixed with a little planning and time. It’s much better to solve those things before you fall in love with a home than three days before financing conditions are due.
And please remember — just because a lender says you qualify for a certain amount does not mean you have to spend that much.
Some of the happiest homeowners I know bought below their maximum approval and left themselves breathing room financially. Funny enough, those are usually the people sleeping best at night when interest rates rise or life throws a curveball.
Buying a home should feel exciting, not terrifying.
So before you start measuring living rooms for sectional sofas or debating paint colours, take the time to get a proper pre-approval completed and run the real monthly numbers carefully.
Future-you will be very grateful.
