It is a good idea to meet with your mortgage broker, or a loans officer before going house-hunting. The mortgage broker will calculate the price range of properties you can consider. The application will also give you an interest rate guarantee to protect you against increases in mortgage rates for 60 to 120 days.

At the end of this meeting you are then able to tell your Realtor that you are 'pre-approved' for (or have a 'pre-arranged' mortgage for; or you are 'pre-qualified' for) a mortgage for 'X dollars'. Most realtors are then willing to spend more time with you as they then know that you are a serious, qualified purchaser.

The mortgage broker will need to know, fairly accurately, the following information:

• Your gross annual income (net income in the case of a self-employed individual)
• How much money you have for your downpayment
• Your assets and liabilities
• All monthly payments that you are required to make

The mortgage broker will usually ask your permission to perform a credit bureau enquiry at this time. If you have had prior credit problems, this may effect the rate that the broker can obtain for you. Inform the broker of any possible problems.

Your mortgage broker will calculate the amount of the mortgage for which you qualify. Together with your downpayment, you will then have an accurate idea as to the maximum amount that you can spend on a house.

Even though YOU  have been pre-approved for a mortgage you should still have a 'subject to financing' clause in your Contract of Purchase and Sale. The value of the property you wish to buy is part of the final approval process, and an appraisal may be necessary. Mortgage applications may be declined because lending institutions are not willing to mortgage properties, even though the applicants are well-qualified.

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