How to Get Mortgage Preapproval from TD

What is mortgage preapproval?

A mortgage preapproval is a conditional commitment from a lender indicating how much they are tentatively willing to lend you, based on a review of your financial information. It is more in-depth than a simple prequalification and typically requires supporting documentation and a hard credit check.

For TD, preapproval is a formal step that gives you a clear sense of the mortgage amount you may qualify for and locks in a rate for a set period. This can be valuable when you are house hunting because you know your budget before you start making offers.

• A preapproval letter usually includes the maximum loan amount, estimated interest rate, loan program, loan term, estimated monthly payment, and expiration date.
• Preapproval is not the same as final loan approval; final approval depends on underwriting and property appraisal.

Sources: Rocket Mortgage, Business Insider

Why you should get preapproved

Getting preapproved has several benefits. It helps you understand how much you can afford, so you can focus your home search on properties in your price range. It also signals to sellers that you are a serious buyer, which can strengthen your offer.

A preapproval can also help you identify potential issues that might jeopardize your ability to get approved for a mortgage. By addressing these early, you can avoid surprises later in the process.

With TD, the preapproval process can be completed online, and if the interest rate goes down during the hold period, you can ask to have your pre-approved rate adjusted to the lower current rate.

• Strengthens your home offer and is often required by sellers and real estate agents.
• Helps you identify potential issues early.
• Locks in a rate for a period, protecting you if rates rise.

Sources: Rocket Mortgage, Business Insider, TD Canada Trust

TD's preapproval process

TD offers an online mortgage preapproval application that takes about five minutes and provides an immediate response. Importantly, submitting the application online uses a soft credit check that does not impact your credit score.

If you prefer a more personal touch, you can also meet with a TD mortgage specialist in person. The process involves reviewing your financial situation, including your income, debts, and assets, to determine how much you can borrow.

Once you are preapproved, TD will provide a preapproval letter that outlines the mortgage amount, interest rate, and terms. This letter is typically valid for 120 days for the rate hold, subject to all conditions.

• Online application takes about five minutes and provides an immediate response.
• In-person meetings are also available.
• Preapproval includes a 120-day interest rate hold.

1. Submit your application online or meet with a TD mortgage specialist.
2. Provide the required financial information and documentation.
3. Receive your preapproval letter with your rate and amount.
4. Use your preapproval to guide your home search and make an offer.

Sources: TD Canada Trust, TD Stories, Ratehub.ca

Documents needed for preapproval

To get a mortgage preapproval from TD, you will need to provide documentation that verifies your identity, income, and financial situation. The exact documents may vary, but common requirements include T4 slips, Notices of Assessment, bank statements, and proof of identity.

For TD specifically, you may need to provide current address, previous address if less than 3 years, employment information, and sources of verifiable income. Being prepared with these documents can help streamline the process.

• T4 slips to verify income.
• Notices of Assessment from the Canada Revenue Agency.
• Bank statements to show assets.
• Proof of identity, such as a driver's license or passport.
• Employment information and sources of verifiable income.

Sources: TD Canada Trust, Rocket Mortgage

Preapproval vs prequalification

Prequalification and preapproval are often used interchangeably, but they are not the same. Prequalification is an estimate based on self-reported financial information and usually involves a soft credit check that does not impact your credit score.

Preapproval, on the other hand, is more in-depth. It requires supporting documentation and a hard credit check, which may cause a small, temporary dip in your credit score. Because it involves a more thorough review, preapproval gives you a more accurate picture of what you can borrow.

TD also distinguishes between the two, with preapproval being a more formal commitment. This distinction is important when you are serious about buying a home.

• Prequalification: estimate based on self-reported info, soft credit check, no impact on score.
• Preapproval: requires documentation, hard credit check, more accurate.
• Preapproval may cause a small, temporary dip in your credit score.

Sources: Rocket Mortgage, Business Insider, Allied Mortgage

How to use your preapproval effectively

Once you have your preapproval, use it strategically. Share it with your real estate agent and include it with any offers you make. Sellers often expect it, and it can give you a competitive edge in a hot market.

Remember that a preapproval is not a guarantee of final approval. Your mortgage still depends on underwriting and the property appraisal. Keep your financial situation stable, avoid making large purchases or opening new credit, and stay in touch with your TD mortgage specialist if your circumstances change.

If you are considering multiple lenders, note that getting preapprovals from multiple lenders within a 45-day window can limit the impact on your credit score. This allows you to shop around while protecting your credit.

• Present your preapproval letter when making an offer.
• Keep your financial situation stable to avoid complications.
• Consider getting multiple preapprovals within a 45-day window to compare offers.

Sources: Rocket Mortgage, Business Insider, TD Canada Trust