Ready to start home shopping in Vaughan but unsure what you can comfortably afford? In a busy York Region market, a true mortgage pre-approval gives you clarity and confidence before you tour a single property. You will know your budget, your rate hold, and how to structure a strong offer. This guide gives you a step-by-step checklist, what lenders look for in Canada, Vaughan-specific costs, timelines, and smart questions to ask. Let’s dive in.
What mortgage pre-approval means
A mortgage pre-approval is a lender’s conditional commitment that outlines how much they may lend you and a preliminary interest rate range after checking your credit and reviewing your documents. It is not final approval. Final approval happens after you choose a property and the lender verifies the details and removes conditions. You can read more about how pre-approvals work in the Financial Consumer Agency of Canada’s overview of mortgage pre-approvals.
- Why it helps: It shows sellers you are serious, sets a clear price range, and often includes a rate hold for a set period.
- What it is not: A guarantee. Your file will be re-checked and the property must appraise and meet lender guidelines.
- Validity: Many lenders hold a rate for about 60 to 120 days depending on the product and provider.
For a plain-language explainer on insurance and approval steps, see the Canada Mortgage and Housing Corporation’s guidance on mortgage loan insurance.
Vaughan specifics to know
- Neighbourhoods and property types: Vaughan includes Woodbridge, Maple, Kleinburg, Concord, and parts of Thornhill, with a mix of detached homes, semis, townhomes, and growing condo options near Vaughan Metropolitan Centre and transit corridors.
- Prices and market checks: Home prices in Vaughan have historically trended above many Ontario regions due to proximity to Toronto and strong demand. For current stats, review the Toronto Regional Real Estate Board’s latest Market Watch reports.
- Land Transfer Tax: In Vaughan, you pay Ontario’s provincial Land Transfer Tax. There is no additional City of Toronto municipal LTT. Review rates and calculators on the Government of Ontario’s Land Transfer Tax page.
- First-time buyer relief: Ontario offers a provincial LTT refund for eligible first-time buyers. Check eligibility and maximums on the province’s Land Transfer Tax refund page.
- Non-resident note: The Non-Resident Speculation Tax rules have changed over time. If you are not a Canadian citizen or permanent resident, review current guidance on the Government of Ontario’s Non-Resident Speculation Tax page and speak with your lawyer or accountant.
- Condos: Lenders evaluate condo fees, the building’s status certificate, and reserve fund. Learn what a status certificate includes from the Condo Authority of Ontario.
- Timelines: Organized files may get a pre-approval the same day or within a few business days. Self-employed or complex income can take longer.
Your mortgage pre-approval checklist
Gather these items before you call a lender or broker. Having them ready speeds up the process and reduces back-and-forth.
Identification and credit
- Government photo ID such as a driver’s licence or passport.
- Social Insurance Number to authorize a credit check.
Income and employment
- Recent pay stubs, typically the last 2 to 3.
- Letter of employment with role, start date, salary, and HR contact.
- T4s for the last 1 to 2 years.
- Recent Notices of Assessment from CRA.
- For commission, bonus, or overtime income: proof of consistency such as contracts or historic pay.
Self-employed documentation
- Two years of Notices of Assessment.
- T1 General and T2125 forms, plus business financial statements if incorporated.
- HST returns if applicable.
Assets and down payment
- Bank statements for the last 2 to 3 months showing down payment and closing funds.
- Statements for RRSPs, GICs, or investments.
- Gift letter if funds are gifted, plus proof of the donor’s source of funds.
Debts and obligations
- Statements for credit cards, lines of credit, car loans, and student loans.
- Court orders for child or spousal support, if applicable.
If you have a property in mind
- MLS listing or address and property type.
- For condos: status certificate details and condo fees.
- For income properties: leases and proof of rental income.
How lenders decide what you qualify for
Credit score and history
Lenders review your credit report from Equifax or TransUnion. For best pricing, many lenders look for higher scores, often 680 and up. Some insured programs may accept scores in the low 600s, but rates or conditions can differ. Learn how credit scores work from Equifax Canada’s education hub.
Income and employment stability
Stable employment and documented income matter. Contract roles or frequent job changes may require extra proof such as contract length and renewal history. Self-employed buyers usually provide two years of tax returns and financial statements.
Down payment rules in Canada
- Less than 20 percent down requires mortgage default insurance.
- Minimums for insured mortgages: 5 percent on the first 500,000 dollars of price and 10 percent on the portion from 500,000 to 999,999 dollars. Homes at 1,000,000 dollars or more require at least 20 percent down.
- Review minimum down payment rules with the Financial Consumer Agency of Canada, and see CMHC’s overview of mortgage loan insurance.
GDS and TDS ratios
Lenders use two key ratios to measure affordability.
- Gross Debt Service: housing costs to income. A common guideline maximum is 39 percent.
- Total Debt Service: all monthly debts to income. A common guideline maximum is 44 percent.
See FCAC’s guide on how much mortgage you may qualify for and how ratios work.
Mortgage stress test
Federally regulated lenders must qualify you at the higher of your contract rate plus 2.00 percent or a minimum benchmark set by regulators. This reduces your maximum purchase budget compared to qualifying at the contract rate alone. Review the OSFI B-20 guideline for current stress test rules and updates.
Closing costs and condo fees
Plan for closing costs such as legal fees, title insurance, land transfer tax, appraisal and other disbursements. A common range is about 1.5 to 4 percent of the purchase price, depending on your situation. For condos, lenders include half of condo fees in the GDS ratio, which can reduce borrowing capacity.
The pre-approval process
- Gather documents and check your credit for errors.
- Apply with a lender or broker and consent to a credit check.
- The lender reviews income, credit, assets, and debts, then issues a conditional pre-approval with a maximum amount, rate hold, and an expiry date.
- Shop for homes within your pre-approved range. Keep a buffer for closing costs.
- Once you have an accepted offer, submit a full application. The lender orders an appraisal, reviews the property and condo status if applicable, and removes remaining conditions for final approval.
Common pitfalls and how to avoid them
- High debt ratios: Pay down revolving balances and avoid new credit before closing.
- Thin or inconsistent income: Provide full tax documents and proof of ongoing work, especially if self-employed.
- Undocumented down payment funds: Keep funds in your account for at least 90 days and obtain a proper gift letter if needed.
- Property concerns: Some condos or properties with condition issues may not fit lender guidelines. Share the listing early so your lender can flag risks.
- Overreliance on pre-approval: Remember it is conditional. Do not waive financing without speaking to your lender.
Smart questions to ask your lender or broker
- How long is the pre-approval valid and is the rate hold guaranteed?
- What qualifying rate was used under the stress test and how would a rate change affect my budget?
- Which documents are still outstanding for final approval?
- Will I need mortgage default insurance and what is the premium?
- What are the prepayment options and penalties if I break the mortgage early?
- Who pays for the appraisal and approximately when is it ordered?
- What closing costs should I budget for in Vaughan?
- Do you have restrictions on certain condo buildings or property types?
- For self-employed income, which specific documents and years do you require?
- Is the mortgage portable if I move before the term ends?
Your next steps
Getting pre-approved before booking showings keeps your search focused and puts you in a stronger position when the right home appears. Organize your documents, confirm your numbers, and align your budget with local costs like Ontario’s Land Transfer Tax. When you are ready, connect with a responsive, single point of contact who knows Vaughan’s mix of detached homes, townhomes, and condos.
If you want help coordinating your pre-approval and setting up a tailored home search, reach out to Sam Galloway. We will walk you through each step, set up your My Search Portal, and get you the latest listings first.
FAQs
How long does a mortgage pre-approval last in Ontario?
- Many lenders hold a rate for about 60 to 120 days, after which you may need to update documents and re-qualify.
What credit score do I need for a mortgage in Canada?
- For best pricing many lenders look for scores around 680 or higher, though some insured options may accept scores in the low 600s depending on the file.
How much down payment is required for an 800,000 dollar home?
- Minimum is 5 percent on the first 500,000 dollars (25,000) plus 10 percent on the next 300,000 dollars (30,000) for a total of 55,000, plus closing costs.
What closing costs should I expect when buying in Vaughan?
- Budget about 1.5 to 4 percent of the purchase price for legal fees, title insurance, land transfer tax, appraisal, and adjustments; Vaughan does not have Toronto’s municipal LTT.
How does the mortgage stress test affect my budget?
- You must qualify at the higher of your contract rate plus 2.00 percent or a set benchmark, which reduces the maximum mortgage compared to using the contract rate alone.
Do condo fees impact mortgage qualification?
- Yes. Lenders include half of condo fees in the GDS ratio, so higher fees can reduce the amount you qualify to borrow.
Financial Consumer Agency of Canada’s mortgage pre-approvals
CMHC mortgage loan insurance
OSFI B-20 guideline
Ontario Land Transfer Tax
Ontario first-time buyer LTT refund
TRREB Market Watch
Condo Authority of Ontario: status certificate
Ontario Non-Resident Speculation Tax
Equifax Canada credit score education
FCAC: How much mortgage can you afford
