This is the stage where you find out what you can actually borrow, before you look at a single listing. Nothing here commits you to anything. The work is establishing three numbers: your down payment, your qualifying income, and the price those two support.
Pekoe Mortgages is licensed in Ontario (FSRA #13321) and Alberta (RECA). This stage page routes you to the answer. It does not replace it.
One thing: the price range you can actually finance. Everything downstream depends on it. A pre-approval, an offer, an appraisal and a closing all assume you got this number right, and correcting it later costs you a deal rather than an afternoon.
You can do this stage with nothing but a conversation and a few documents. No application is submitted, no credit decision is made, and no lender is chosen. The output is a number and the reasoning behind it.
| Step | Who does it | What it produces |
|---|---|---|
| Establish the down payment you genuinely have, and where it came from | You | A figure you can document, not an estimate |
| Check your credit, and fix anything wrong before a lender sees it | You, with your broker reading it | A score and a clean report |
| Set out your income the way a lender will read it | You and your broker | Qualifying income, which is often not your gross pay |
| Apply the stress test to the result | Your broker | The qualifying rate your file is tested at |
| Convert that into a purchase price range | Your broker | A price band and the down payment each end of it needs |
| Decide whether to stretch, wait, or add a co-borrower | You | A plan for stage 2 |
If a step above is the one you are stuck on, the reading list further down goes straight to it.
Doing most of the work. Gathering documents and deciding how much risk you want to carry.
Reading your file the way a lender will, and telling you the number. No lender is approached yet.
No lender, no lawyer, no appraiser, no real estate agent. Bringing them in now is premature and costs you nothing but time.
That short list is the point of this stage. It is the only part of the journey you can complete without anyone else committing to anything.
| Document | Why it is needed | What delays it |
|---|---|---|
| Proof of down payment, with 90 days of account history | A lender has to see the money and where it came from | Recent transfers between accounts, cash deposits, funds held abroad |
| Income documents for your employment type | Qualifying income is calculated differently for salary, hourly, commission and self-employment | Self-employment, which needs two years of filings |
| A gift letter, if any of the down payment is gifted | The lender needs it confirmed as a gift, not a loan | Getting the signature from the person giving it |
| A list of your debts and their minimum payments | They reduce what you qualify for, sometimes sharply | Forgotten lines of credit and student loans |
You do not need a property, an offer, or a lawyer at this stage. Those belong to stages 3 and 5.
Working out the number. How much mortgage can I afford? and the mortgage stress test explained.
Your credit. What credit score you need, raising it before you apply, buying with bad credit, and whether a pre-approval hurts your score.
The down payment. Using RRSP funds, cryptocurrency as a down payment, and the minimum on a rental property.
First-time buyers. Buying your first home in Alberta, the Ontario land transfer tax rebate, and Calgary compared with Edmonton.
Bringing in another person. A co-signer and a guarantor are not the same thing, and the difference decides who goes on title and whose debts count against the application.
First-time buyer programmes. Whether Alberta has a first-time buyer grant, and what Alberta buyers get instead.
New to Canada. Where a newcomer actually starts, including the programmes that treat a short Canadian credit history as workable rather than disqualifying.
Choosing a province. Buying in Ontario and Alberta compared and moving from Ontario to Alberta.
No, and doing it in that order wastes a credit check. Work out the number first with your broker, then take it into a pre-approval in stage 2.
Checking your own credit report does not. A lender pulling it as part of an application can, which is why no application is submitted at this stage.
A single conversation, once your documents are together. Gathering the documents is usually what takes the time, particularly the 90 days of down payment history.
No. This is an assessment of your file. A pre-approval is a lender indicating what it would lend, and even that is not a commitment on a specific property.
You can, and people do. The risk is finding something you cannot finance, which costs you the property and sometimes a deposit once an offer is in.
Your qualifying income is calculated differently from your gross pay, and it usually needs two years of filings. Raise it at this stage rather than at underwriting.
It can, because their income and debts enter the calculation alongside yours. It also makes them responsible for the mortgage, which is a decision to take deliberately.
Stage 2, getting pre-approved, where a lender looks at your file for the first time and tells you what it would lend.
Pekoe Mortgages is a licensed brokerage in Ontario (FSRA #13321) and Alberta (RECA). This page is general information, not financial advice, and does not create a broker and client relationship.