The process lenders use to determine how much you can borrow based on your income, existing debts, credit score, down payment, and the property itself. In Canada, qualification involves the mortgage stress test and is governed by the Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. Pre-qualification is a rough estimate, while pre-approval involves a full credit check and documentation review.
Why It Matters
Understanding how lenders qualify you helps set realistic expectations before you start house hunting. Your qualification amount is a ceiling, not a target -- borrowing the maximum can leave you stretched thin. Get qualified early so you know your budget and can move quickly when you find the right property.
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