PRE-APPROVED FOR A MORTGAGE — WHAT DOES IT REALLY MEAN?

Many buyers assume that once they receive a pre-approval, they’re fully cleared to make an offer — even a subject-free one. But a pre-approval is only half of the equation, and relying on it without protection can lead to serious financial consequences.

See why a pre-approval does NOT guarantee full approval on the property you choose. 👇

A pre-approval confirms that YOU qualify — but the lender still needs to approve the specific property before anything becomes final.

1️⃣ A Pre-Approval Only Covers Your Financial Profile

A pre-approval is based on your current income, down payment, liabilities, and credit history. 

✔️ must be verified with documentation 

✔️ accuracy depends on up-to-date information 

✔️ no major changes allowed before closing 

If your finances change before you buy, your actual approval can change too.

2️⃣ Always Include a “Subject to Financing” Clause

A subject-free offer can expose you to serious risk. 

✔️ protects you if the lender declines the property 

✔️ safeguards your deposit 

✔️ gives time for lender review and appraisal 

Without this clause, you could lose your deposit — and face legal consequences.

3️⃣ The Lender Must Approve the Property Too

Even if YOU qualify, the property may NOT. 

✔️ low appraisal values 

✔️ structural or maintenance issues 

✔️ zoning concerns 

✔️ problematic strata documents 

The lender evaluates the property’s safety, condition, and long-term marketability — not just your finances.

4️⃣ Examples of Why a Property Might Be Declined

Several issues can lead a lender to reject a property. 

✔️ appraisal comes in below purchase price 

✔️ strata minutes reveal leaks or major repairs 

✔️ inadequate contingency fund 

✔️ non-residential zoning or mixed-use classification 

These issues create risk for the lender, and approval is not guaranteed.

5️⃣ Properties Lenders Commonly Avoid

Some types of homes are known red flags for lenders. 

✔️ former grow-ops or drug lab sites 

✔️ leased land or co-ops 

✔️ age-restricted buildings 

✔️ homes under 500 sq. ft. 

✔️ knob-and-tube or aluminum wiring 

✔️ asbestos or vermiculite insulation 

✔️ self-managed strata 

✔️ ongoing assessments or lawsuits 

Any of these can result in a declined mortgage, even if you’re pre-approved.

💬 Final Thought

A pre-approval is a valuable first step — but it does NOT replace the need for a full property review. Protect yourself, protect your deposit, and always include a subject-to-financing condition until the lender confirms both you and the property are fully approved.

If you’d like The Frontline Mortgage Group to walk you through the pre-approval process and review properties before you offer, send us a message anytime.