Understanding My 3-Step Mortgage Pre-Approval Process

Tim Lyon • May 9, 2024

Getting pre-approved is your first real step toward homeownership. It tells you what you can afford, gives you confidence when shopping, and shows sellers you're a serious buyer.


I've designed a thorough three-step process to ensure the pre-approval you receive is accurate and reliable. Unlike quick online estimates, I fully analyze your file the same way a lender will, catching potential issues early when we have time to fix them.


Here's how it works.


Step 1: The Discovery Call

Before anything else, we start with a conversation.
This is where I properly introduce myself and learn about what you’re trying to do, whether that’s buying your first home, upsizing, or planning a future purchase.

During this call, I’ll ask a lot of questions. This helps me understand:

  • Your financial situation
  • Your homeownership goals
  • Your comfort level with payments
  • Any potential challenges we should plan for

The better I understand your situation, the more accurate and relevant your pre-approval will be.


What to expect: 30-45 minutes. Come prepared to discuss your finances openly.


Step 2: Application and Documentation

After our call, I’ll send you a secure link to complete your mortgage application, along with a tailored document request list.


The Application

Many questions will seem familiar from our call. This redundancy is intentional - it helps me catch any discrepancies and ensures nothing slips through the cracks.


The Documents

This is the most tedious part, but it's essential. Everything on a mortgage application needs supporting documentation.

I'll provide a complete list with instructions. If you want to get an early idea of the type of documents that will be required. you can review my general document checklist here: Mortgage Pre-Approval Document Checklist


Critical rule: Do not edit, adjust, or redact any documents. Lenders need to see everything in its original form. Even innocent edits can cause delays or issues.


Step 3: Review and Pre-Approval

Once I’ve received your application and documents, I’ll get to work reviewing your file in detail. This is where I fully underwrite your pre-approval, meaning I look at your file the same way a lender ultimately will.


This approach lets me:

  • Identify any small issues early, such as:
  • Incorrect or outdated credit items
  • Down payment funds that aren’t readily accessible
  • Differences between actual income and what lenders will use
  • Low or borderline credit scores
  • Fix or plan around potential problems before they become deal-breakers later


After the review, I’ll send you a personalized video walkthrough of your pre-approval, outlining:

  • What you qualify for
  • The options available to you
  • My analysis and recommendations


I typically present 3–5 options so it’s clear and not overwhelming—but if you want to explore additional scenarios, I’m always happy to dig deeper.


Once you’ve received your video and pre-approval summary, you’re officially pre-approved.

At this point, you can shop with confidence.


What Makes My Pre-Approvals Different

My pre-approval is my expert analysis of what you'll qualify for, based on my thorough understanding of lender guidelines. At this stage, no lender has reviewed your file yet - that happens after you have an accepted offer.

You might wonder: "If a lender hasn't seen my file, how can I trust this?"


Here's why you can shop with confidence:


I analyze your file the exact same way a lender will. With access to over 50 lenders, I understand what each one looks for, how they calculate income, what down payment sources they accept, and their credit requirements.


I catch issues before they become problems. By thoroughly reviewing everything myself, I identify concerns early when we have time to address them - not when you're under pressure with an accepted offer.


I take responsibility for accuracy. When I tell you what you're pre-approved for, I'm putting my professional reputation behind that assessment.


This approach gives you flexibility. Once you find your property, we can choose the optimal lender for your specific situation rather than being locked into one lender from the start.

 

Quick Summary

My 3-step pre-approval process:

  1. Discovery Call: We discuss your goals and financial details.
  2. Application & Documents: You complete your application and send supporting documents.
  3. Full Review & Video Summary: I analyze your options, flag issues early, and send you a clear breakdown of your pre-approval.


Bonus: Every pre-approval I issue is fully underwritten so you can move forward with confidence and avoid last-minute stress.


Next Steps

If you’re ready to start your pre-approval or just want to understand your options, let’s set up a call.

Book a consultation or call 778-988-8409.

Tim Lyon

Mortgage Consultant

Credit and Mortgage Financing

By Tim Lyon • October 9, 2025
Credit. The ability of a customer to obtain goods or services before payment, based on the trust that you will make payments in the future. When you borrow money to buy a property, you’ll be required to prove that you have a good history of managing your credit. That is, making good on all your payments. But what exactly is a “good history of managing credit”? What are lenders looking at when they assess your credit report? If you’re new to managing your credit, an easy way to remember the minimum credit requirements for mortgage financing is the 2/2/2 rule. Two active trade lines established over a minimum period of two years, with a minimum limit of two thousand dollars, is what lenders are looking for. A trade line could be a credit card, an instalment loan, a car loan, or a line of credit; basically, anytime a lender extends credit to you. Your repayment history is kept on your credit report and generates a credit score. For a tradeline to be considered active, you must have used it for at least one month and then once every three months. To build a good credit history, both of your tradelines need to be used for at least two years. This history gives the lender confidence that you’ve established good credit habits over a decent length of time. Two thousand dollars is the bare minimum limit required on your trade lines. So if you have a credit card with a $1000 limit and a line of credit with a $2500 limit, you would be okay as your limit would be $3500. If you’re managing your credit well, chances are you will be offered a limit increase. It’s a good idea to take it. Mortgage Lenders want to know that you can handle borrowing money. Now, don’t confuse the limit with the balance. You don’t have to carry a balance on your trade lines for them to be considered active. To build credit, it’s best to use your tradelines but pay them off in full every month in the case of credit cards and make all your loan payments on time. A great way to use your credit is to pay your bills via direct withdrawal from your credit card, then set up a regular transfer from your bank account to pay off the credit card in full every month. Automation becomes your best friend. Just make sure you keep on top of your banking to ensure everything works as it should. Now, you might be thinking, what about my credit score, isn’t that important when talking about building a credit profile to secure a mortgage? Well, your credit score is important, but if you have two tradelines, reporting for two years, with a minimum limit of two thousand dollars, without missing any payments, your credit score will take care of itself, and you should have no worries. With that said, it never hurts to take a look at your credit every once and a while to ensure no errors are reported on your credit bureau. So, if you’re thinking about buying a property in the next couple of years and want to make sure that you have good enough credit to qualify, let’s talk. Connect anytime; it would be a pleasure to work with you and help you to understand better how your credit impacts mortgage qualification.

How Mortgage Rates Work: Fixed vs. Variable

By Tim Lyon • September 26, 2025
What affects mortgage rates? Does the Bank of Canada rate affect fixed-rate mortgages? These are questions that come up all the time, so in this this post, I’ll explain how fixed and variable rates are determined, why they don’t always move together, and what that means for you as a borrower. But to start with the short answer: While Bank of Canada announcements immediately impact variable rates, fixed rates usually have those expectations already baked in long before the announcement. That’s because fixed rates are forward-looking — they reflect where markets think rates are headed, not just where they are today. What Are Fixed and Variable Rates? Fixed Rate The interest rate stays the same for the entire mortgage term. Payments remain consistent, no matter what happens in the market. Variable Rate The interest rate changes during the mortgage term, moving up or down depending on the lender’s prime rate. Payments may stay the same (VRM) or change (ARM). How Do Fixed Rates Work? When you choose a fixed rate, the lender is guaranteeing your rate for the length of your term . To do this, they need to estimate what a fair rate will be over that time. This makes fixed rates more forward-looking — they often reflect not just today’s conditions, but also what the market expects to happen in the future. Key Points About Fixed Rates Strongly influenced by the Canadian bond market (especially the 5-year government bond yield). Lenders adjust their fixed rates based on investor expectations for inflation and future interest rates. Often, Bank of Canada moves are already baked into fixed rates before they happen. Example If bond yields suggest that rates will rise in the next year, lenders may increase fixed rates now, even if the Bank of Canada hasn’t made a move yet. How Do Variable Rates Work? Variable rates move directly with the Bank of Canada’s overnight rate. When the Bank of Canada raises or lowers its rate, lenders adjust their prime rate accordingly, and variable mortgages follow. For borrowers, the most important detail is the discount from prime , because that sets the actual rate you pay. For example, if prime is 4.95% and your mortgage is Prime – 0.5%, your rate is 4.45%. The discounts lenders offer change over time. In periods of economic uncertainty, lenders usually shrink the discount they offer, which can make new variable mortgages less attractive even if prime is coming down. Key Points About Variable Rates Directly tied to the Bank of Canada’s overnight rate, which is reviewed eight times a year. Banks adjust their prime rate in response to these moves. Your actual rate = Prime – discount (e.g., Prime – 0.5%). Example If prime is 4.95% and your mortgage is Prime – 0.5%, your rate is 4.45%. If the Bank of Canada cuts rates by 0.25%, prime drops to 4.70%, and your rate automatically drops to 4.20%. Why Don’t Fixed and Variable Always Move Together? Fixed rates reflect the bond market, which looks ahead at where rates and inflation may go. Variable rates respond directly to Bank of Canada decisions, reflecting current conditions. This is why fixed rates can fall while variable rates stay flat, or vice versa. Next Steps If you’re deciding between fixed and variable, understanding how each is set is the first step. The next is to match the right mortgage type to your budget and comfort with risk. If you’d like to review which option works best for you, I’d be happy to help. Need help with your mortgage? Book a consultation or call 778-988-8409 . Mortgage Term Glossary Amortization: The total length of time it will take to pay off your mortgage completely (typically 25–30 years in Canada). Bond Yield: The return investors get from government bonds. Used as a benchmark for fixed mortgage rates. Discount (Variable Rate): The amount subtracted from prime to determine your actual mortgage rate. Fixed Rate: An interest rate that stays the same for the entire mortgage term. Mortgage Term: The length of your mortgage contract with your lender (typically 1–5 years), after which you need to renew. Overnight Rate: The interest rate at which major banks borrow and lend money to each other, set by the Bank of Canada. Prime Rate: The interest rate banks use as a baseline for loans, influenced by the Bank of Canada’s overnight rate. Variable Rate: An interest rate that changes during your mortgage term based on lender prime rates.