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how to get approved for a home loan

How To Get Pre-Approved For a Home Loan

By | Blog, Home Equity Loan, Mortgage Solutions, Private Mortgage Lender | No Comments

If you’re wondering how to get pre-approved for a home loan, you’re in luck, because it’s a pretty simple process. On the other hand, determining what type of home loan you are trying to get approved for takes some expertise. First, we must first figure out what type of lender will you qualify under. Most applications for a home loan start with a bank or credit union, but what if your application doesn’t fit under these strict guidelines? A mortgage broker can help navigate what types of home loan lenders would work best for your application. Continue reading to learn everything you need to know about pre-approvals for home loans.

Types Of Pre-Approvals For Home Loans:

  • Purchase pre-approvals
  • Refinance pre-approvals
  • LOC pre-approvals
  • B-lender mortgage pre-approvals
  • Home Equity Loan pre-approvals
  • Private mortgage pre-approvals

What Is Required For a Pre-Approval?

A mortgage pre-approval is a promise from a lender (primarily a bank or credit union) to borrow up to a specific amount of money at a specific interest rate subject to you meeting certain income, asset requirements and a property appraising to verify lending value.

A pre-approval for a home loan will take into consideration your credit and income. The types of income can vary based on your employment type, which determines what documents and assets you will need to submit. If you have a Salaried Income, this means you would generally submit a job letter and paystub along with your NOA notice of assessment. If you receive commission, bonus, or overtime income, two years of T4’s will be required.

For more complex income types such as self employment income, if you have any write offs or other benefits, then additional documents will be required:

  • 2 years T1 General
  • 2 years NOA
  • 2 years of company financials (if incorporated)

In addition to the above, other assets will also be required. Assets can include automobiles, RRSP, GIC, Stocks/Bonds as well as personal assets like tools, jewelry, art, etc. Learning about how to get pre-approved for a home loan is the most important first step, because you need to know what is required depending on your unique situation. We want to get you pre-approved on the first try.

how to get pre approved for home loan man woman looking at their documents

What Is The Difference Between Pre-Approval & Pre-Qualification?

A pre-qualification and a pre-approval for home loans differ in the documented proof required in a pre-approval. Pre-approvals look at your verified income and credit along with the amount of debts you hold. Once you have been granted a pre-approval for a mortgage loan, you are issued a commitment with subject to meet with documented verification and appraisal values.

A pre-qualification just calculates how much you may be qualified to purchase without looking into income, credit or assets.

Pre-Approval B-lender

A home loan pre-approval from a B-lender differs from other banks and credit unions mainly because they will not fully underwrite a file for pre-approval. Because of this, you must work with a broker to make sure you have as much of your income and credit details worked out prior to submitting an offer to purchase for a home. 

B-lenders will look at a full application with all income and credit documents as well as a contract to purchase an offer. The pre-qualifying for B-lender financing is more uncertain than qualifying at a conventional bank or credit union. 

The biggest difference is B-lenders have unique products for income and credit that traditional lenders don’t offer.

Home Equity Loan Pre-Approval 

So, how do you get pre-approved for a home equity loan? We have good news for you. In most cases, home equity lenders do not offer pre-approvals. This type of financing is considered “common sense financing”, so it is easier to qualify for. Since the home is the focus for security, lenders will look at live deals only. An experienced mortgage broker can help underwrite an application to better position for a file for approval. Brokers can work through your application and provide you with options based on several different Loan-To-Values. Home equity loan rates are based on Loan-To-Value. These Loan-To-Value rates are triggered at LTV’s starting at < 50% – 75%. An experienced broker will be able to give you an estimate of rates/costs for each of these LTVs.

Pre-Approvals With a Private Mortgage Lender

Pre-approvals with a private mortgage lender are, again, case by case. Private lenders typically only approve live applications. In some cases, it’s possible for a private lender to obtain a pre-approval, but it will be subject to more than just the value of your home. Many times, the lender will want to see valid comparable property as well as a narrow scope of comparable sales. This is primarily due to private lenders (most commonly home equity loan and HELOC lenders) not qualifying for CMHC insurance. This means that if there is an error in the value of the property, the loss is not covered by insurance. 

Get a Free Assessment

So, you’re still wondering how do you get pre-approved for a home loan, and not sure of the next steps? Give Jeff Di Lorenzo a call today, or get in touch through our contact form for a free assessment of your situation. We’ll help you get the loan you need the first time around.

Consumer Proposal Mortgage Broker

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Deal Of The Month October 2019

One of my favorite challenges being a mortgage broker is to work alongside a client who has already been told no. Either by their banks or another mortgage specialist. A file that comes to mind is a client that resides in Surrey who was informed by his primary bank that because he was 7 months out of a Consumer Proposal, they would not be able to support him with any type of mortgage products.

After speaking with the client and gaining some insights I started working on his file believing there was a product for him. Upon reviewing his Equifax I discovered that a trade line was still registered as outstanding. I instructed the client to contact Equifax and ask for the correction. The client went from a 520 to 669 in a month. That is a 149 point increase in less than a month.

The client, after writing a supportive narrative, qualified for B lending guidelines and was able to purchase a condo that he had his eyes on for months.

The goal is to shift the client to an A lender in the next 12-24 months which we will be supporting him with along the way.

What made a difference in this case:

  • Looking at the file with solution based focusing(If bank say no there could be other options)
  • Reviewing trade lines to ensure that current trade lines are accurate(520 beacon – 669 beacon)
  • Getting the entire story and narrative(client had a great job, great income and a sizable down payment)
  • Support and guidance from a Mortgage Broker(ensuring I provided the client clear instructions and my professional guidance to meet and exceed lenders guidelines)
  • Follow up, the support of a great mortgage broker doesn’t end after the funds are released. Its an ongoing commitment and I aim to deliver the best service I possibly can.

58-18181 68th Ave Surrey BC V3S 9J1
PH: 778-999-6007

2019 Private 1st & 2nd Mortgage Rates BC

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January 2019 Recently Funded

Second Mortgage Surrey BC

Funds to consolidate debt and complete renovations to client’s surrey condo. This was a previous client with a proven payment track record. Was able to provide financing to 65% of BC Assessment

2nd Mortgage Rate 7.95%

Total Mortgage $55,000


Private 2nd Mortgage Langley BC

Both clients had lost their jobs and had new jobs starting the week of funding. Funds were to consolidate debts and bridge themselves until new jobs first cheque. We will be looking to go back to the bank and consolidate the 1st & 2nd once they pass probationary period.

Second Mortgage Rate 10.95%

Total Mortgage $45,000


Private 2nd Mortgage Self Employed Langley

Client was looking to put some money into a new business. Clients credit was great but new income will not allow us to qualify under banks income guidelines.

Private Mortgage Rate 8.99%

Total Mortgage $107,000


Private 2nd Mortgage Langley

Client was BFS consultant for a several of years. He decided he wanted to go back to be an employee with a significant wage cut for the first year. Property is in ALR and recently subdivided.

Equity Loan Rate 8.60%

Total Mortgage $65,000


Private 1st Mortgage Mobile Home

Clients have poor credit due to maximising on too many tradelines, but common-law husbands’ income was strong. Husband was required to sign a guarantor.

Private 1st Mortgage Rate 11.2%

Total Mortgage $100,000

Second Mortgage Richmond BC

Past client with good payment history. Has a very low rate with the bank and still has 3 years left until term is up. Looking to consolidate debt and buy a new car. 2nd mortgage was more cost effective than paying the penalty on the 1st mortgage and raising her 1st mortgage rate by 1% .

2nd Mrt Rate 8.6%

Total Mortgage $105,000


Half Interest 1st Mortgage

Client lives in a home and wife lives over seas. Client looking to borrow on his half of the homes equity to start up a new business.

Half interest 1st mortgage rate 10%

Total Mortgage $75,000


2nd Mortgage West Kelowna

Past client requiring additional funds on a 2nd mortgage in West Kelowna BC. Funds for business capital

Total 2nd mortgage to 70% LTV $40,000

Rate 12.99


1st Private Mortgage Surrey

Client is BFS with low income claimed on taxes. He and a business partner owned the home together, but business partner became ill and wants to settle his estate and be paid out of the property.

Private 1st Mortgage Rate 7.5%

Total Mortgage $340,000


2nd Mortgage Victoria BC

Past client with poor credit and a consumer proposal. Funds to payout consumer proposal and fix up coach home for new tenant.

Second Mortgage Rate Victoria BC 11.5%

Total 2nd Mortgage $84,000


Second Mortgage Port Moody BC

Funds to payout consumer proposal and education.

Total Mortgage Amount $115,000

Private Mortgage Rate 10%


2nd Mortgage Mission BC

Client was at renewal and wished to borrow additional funds to spruce up her home to list it for sale. Past client with an excellent payment history. Able to provide 65% loan to value of BC Assessment no appraisal.

Private mortgage rate 8.99%

Total Mortgage Amount $115,000

man in a suit offering a deal to refinance mortgage with bad credit

Refinance Mortgage with Bad Credit

By | Blog, Home Equity Loan, Refinance Mortgage Bad Credit | 2 Comments

Refinance your mortgage with bad credit

Refinancing your mortgage with bad credit can help you consolidate debt and lower your current monthly payments on all debts. As well by consolidating debts this can help you improve your credit score.

When looking to refinance your mortgage with bad credit you have a few options available to you. Weighing out these options can help you best determine your maximum savings on refinancing your mortgage & loans.

Refinancing with your bank

The first stop on your way to refinancing is generally the current bank you are with. This may become difficult depending on what institution you use in Canada. Banks are required to underwrite mortgages on B20 risk guidelines. These guidelines require credit & debt servicing ratios along with a qualifying rate which can disqualify borrowers that may have qualified a year ago.

Refinancing with a B-Mortgage Lender

If you are close to renewal of your 1st mortgage and have bad credit a B-Lender has products enabling home owners to consolidate debts with lower credit scores and income types. Rates are higher than conventional mortgage lenders like banks but where banks fall short B-Lenders fill a gap. Generally, B-Lenders are used for shorter terms like 2 or 3 years.

Refinancing with a Home Equity Lender or Private Lender

Home equity lenders allow home owners with enough home equity to refinance their mortgage with bad credit.  Equity lenders provide 1st, 2nd & 3rd mortgages to home owners in BC regardless of their credit rating.

Home equity loans in some cases can be a cheaper alternative than refinancing your entire mortgage. Home equity lenders offer Second Mortgages, and, in most circumstances, this is a far cheaper alternative than refinancing a bad credit mortgage as a 1st Mortgage.

When holding a 1st mortgage you have qualified for this mortgage at a great rate. In a market where rates are going up it is usually better to hold most of the mortgage at the best rate possible and obtain a 2nd mortgage to consolidate all the bad credit & other debts.

The uses of a blended rate calculator can help you determine savings.


Can I get a home equity loan with

12 “Can You Get A Home Equity Loan” Questions

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Can you get a home equity loan with Bad Credit?

Yes, you can get a home equity loan with bad credit. You are not going to get a low rate from a bank, however.

A bad credit home equity loan will however help you improve your credit score by paying down your outstanding debt to zero. It will also significantly improve your cash flow. Credit cards and other loans are usually amortized reflecting in a higher payment. Typically, home equity loan payments are interest only giving you a lower payment and better cash flow.

Can you get a home equity loan with low income or no job?

Yes, you can get a home equity loan even without a job or if your income is to low for bank guidelines.

People often loose or switch employment during the term of a mortgage. This can leave you strapped for cash to make your monthly obligations. Low income can also be a hurdle for banks but not for a home equity lender. If your self employed or have unverifiable income an equity mortgage loan might be the answer.

Can I get a home equity loan if I am self employed?

Yes you can get a home equity loan if your self employed.

This is one of the most popular mortgage products for self employed. Many times the self employed have several right offs that affect what they can show for income.

Can you get a home equity loan without an appraisal?

Yes, you can get a home equity loan without an appraisal.

Usually only if the loan to value if very low. Most home equity loans will require an appraisal, especially if the loan to value is over 50%. Not wanting to pay the price for an appraisal will also limit the amount of home equity lenders that will consider your application.

Can you get a home equity loan without a spouse signing?

You can get a home equity loan without the other person on title. Its called a half interest home equity loan.

Tenants in common allow a home owner to borrow on their half interest of the home. Generally, lenders will go to 50% to 60% of that persons half interest.

Can I get a copy of my Appraisal from a home equity loan?

Yes, you can get a copy of the appraisal from your home equity loan.

This can be provided to you after the financing has been completed and the lender and the use of the report has been transmitted. Appraisers only offer one free transmittal of the use of the appraisal so providing you the appraisal prior to this leaves the report useless without paying additional costs.

Can I get a home equity loan on raw land? 

You can certainly get a home equity loan on raw land. Many considerations would be address like where the property is located and the size of the property. Most lenders will lend to 50% to 60% of the lands value.

Can I get a home equity loan in foreclosure?

Yes, you can get a home equity loan if you’re in foreclosure.

A home equity loan is the only mortgage financing for you if your home is in foreclosure. A equity loan works as either a new 1st mortgage to payout your current mortgage lender or as a 2nd mortgage that will bring your current mortgage up to date and back into good standing.

Can I get a home equity loan in a bankruptcy?

Yes, you can get a home equity loan while in bankruptcy however you are usually required by the bankruptcy trusty to payout the bankruptcy with the funds. This is a great way to put an end period to your bankruptcy and enables you to start fresh re-establishing your credit.

Can I get a home equity loan in a consumer proposal?

Yes, you can get a home equity loan while in a consumer proposal.

In some cases, you can leave the proposal in place other the proposal will be required to be paid out with proceeds of the mortgage.

Can I get a home equity loan with no fees?

To obtain a home equity loan with no fees is not possible. Even if someone arranged the loan without charging you any money (which is unlikely) you would still be hit with legal fees, registration costs and possibly appraisal fees.

Can I get a home equity loan with no credit check?

You could get a home equity loan without a credit check. Although most lenders do require a credit check as part of their standard underwriting process.

young boy with a jet pack about to take off

Do You Need Good Credit to Get a Home Equity Loan?

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Do You Need Good Credit to Get a Home Equity Loan?

You don’t need good credit to get a home equity loan. However, you will need good credit to get a lower rate home equity loan. The very essence of a home equity loan is home equity.


How Much Can I borrow Using A Home Equity Loan?

Borrowers can use up to 75% of their home’s equity through an alternative mortgage lender. If you are looking for a HELOC then the maximums 65%.


What are the disadvantages of a HELOC rather than a Home Equity Loan?

HELOC do have some disadvantages like credit and debt servicing ratios. This can significantly reduce the amount of HELOC you qualify for.


What are the advantages of a Home Equity Loan over HELOC?

A home equity loan is approved on home equity not your income or credit. This may allow a home owner to qualify up to 75% of your homes value regardless of income or credit.


Are there costs savings of a HELOC rather than a Home Equity Loan?

HELOC are the cheapest product allowing home owners to obtain rates as low as Prime + .5%. The legal registration of a HELOC is also less. Usually under a thousand dollars for registering and appraising the property.

Home Equity Loans costs however are much higher. Rates can start as low as Prime + 4.55% and up. Additionally, there are higher legal costs and broker or lender fees associated with the financing.

Your BC Mortgage Broker Has More Information on HELOC’s or a Home Equity Loan. Call today


Mortgage Deals November 2018

Private Equity Loans of November 2018

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Alternative and Private Mortgage Deals of the Month November


Home in Peachland BC

Funds to payout Private 1st mortgage and consolidate some consumer debt.

70% Loan to Value

1st Mortgage $388,500

Using client’s home equity, we were able to lower clients previous interest rate and obtain them additional money to pay down debts. Clients still have a low credit score but good income. Debt consolidation should assist in improving credit score and will try to obtain conventional mortgage financing in 2019.


Mobile Home in Langley BC

Private 1st Mortgage to consolidate a Fairstone Loan and other consumer debts.

17% Loan to Value

1st Mortgage $30,000

Pensioners on fixed income had very high payment unsecured debts that were affecting cash flow. We were able to obtain an amortized home equity mortgage over 20 years that significantly improved clients cash flow as well as put some extra money into their pocket, so they could enjoy retirement.


Home Equity Loan 2nd Mortgage small acreage in Duncan BC

50% Loan to Value

2nd Mortgage $80,000

Client took a sabbatical from work for a few years updating his education. Has returned as self employed opening a new practice. Second Mortgage funds were to consolidate debt and inject into business capital.


2nd Mortgage Behind a Private 1st Mortgage Chilliwack Hobby Farm

High 1st mortgage payout penalty required creative 2nd mortgage financing

60% Loan to Value

2nd Mortgage $135,000

With credit scores very low and unverifiable self employed income clients required additional funds to consolidate debts and do some business investments.


Appraisal Clause

New B-20 Appraisal Clause

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New Appraisal Clause AIC

New Appraisal Clause # 17 & #18 added to appraisals.  Appraisal Institute of Canada (AIC) in January 2018 requires appraisers to add these two clauses to reports or their E & O insurance will not cover them. All B-Lenders & Private Lenders can no longer rely on the report unless B-20 legislation has been applied to lending.

How Does The New AIC Clause Affect Private & B-Lenders

Since B-Lending & Private Lenders do not rely on B-20 legislation they no longer can rely on a transmittal letter from the appraiser. This puts a greater emphasis on the lender to do a through underwriting of the file.

Refinance Mortgage Bad Credit BC

Hard Money Lenders in BC

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A hard money lender can mean different things to different people. In BC real estate this refers to individuals or companies like a (MIC. Mortgage Investment Corporations) that lends mortgages outside the banks strict lending guidelines. In the mortgage industry we refer to hard money lenders as private mortgage lenders or home equity lenders.

Where do you find Hard Money Lenders?

There are many places you can find hard money lenders. Primarily you should consult with a Mortgage Broker who would have the proper skills to guide a consumer through the tricky process of mortgage financing. Other places you can find Alternative Mortgage Lender services is through sites in British Columbia like Kijiji and Craigslist. I do not recommend dealing directly with individual money lenders you should use the services of a BC Mortgage Broker.

What Sorts of Loans Do Hard Money Lenders Provide?

Hard money lenders in real estate provide a variety of mortgage financing. Generally these lenders provide 1st Mortgage 2nd Mortgage & 3rd mortgages but can also do draw mortgages for construction and provide commercial mortgage financing as well as stop foreclosure mortgages.

What sort of interest rates do Hard Money Lenders offer?

Interest rates from these types of lenders vary depending on the position 1st 2nd or 3rd of financing and the loan to value as well as the city or towns location. 1st mortgage rates would be your lowest rate then 2nd & 3rd position would be substantially higher rate. For an estimation of private mortgage rates call us and we can give you an estimate right over the phone.

What sorts of Terms Do Hard Money Lenders offer?

These types of mortgage financing come with 1 or 2 year terms. Primarily this type of financing is used to help get home owners out of tough financial situations. A shorter term allows individuals to correct their income or credit situation and improve their financial outlook in hopes to become bankable in as little as 1 year.

Equity Takeout vs Mortgage Refinance

Equity Takeout vs Mortgage Refinance

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Contemplating an equity takeout vs mortgage refinance is simple once you gather the correct information.

A HELOC or home equity takeout or 2nd mortgage is usually your cheapest option if you are in a closed mortgage with time left in the term.

What to consider when looking at refinancing your mortgage

A second consideration would be your current rate you are locked into and today’s best rate offered by your bank.

Step 1: determining if your 1st mortgage is a fixed or variable.

Step 2: determining how long is left in the term of your 1st mortgage

Step 3: determining what the penalty is to break your 1st mortgage

The Costs of refinancing your mortgage

Consider using a mortgage penalty calculator to get an idea of what it would cost to break your 1st mortgage. The largest cost is usually associated with a fixed rate mortgage and the payout penalty; interest differential penalty (IRD) or Three-month interest penalty.

Once you have determined the cost of breaking your 1st mortgage you can start to evaluate if there will be savings in a 1st mortgage refinance.

Additional Costs of refinancing your 1st mortgage

The costs of refinancing your home are many. After determining the penalty there are Discharge fees, Legal fees, Appraisal fees and more.

Home Equity Loan or HELOC

A Home equity loan or 2nd mortgage can mean two things. Either a HELOC up to 65% through a bank. (you must income & credit qualify for this style of mortgage) or a straight equity lender which is not focused on your income or credit rather they rely on the equity in your home. These lenders lend up to 75% of your homes value in major centers.

Cost of a Home Equity LOC or HELOC

HELOC or home equity line of credit is an affordable solution but not all banks offer the product. HELOC maximum loan to value is 65%. You must income & credit qualify. Costs for HELOC are generally legal and appraisal costs and if it’s a strata additional documentation will be required.

Cost of a Home Equity Loan or 2nd Mortgage

Costs of a home equity loan or 2nd mortgage are appraisal costs, legal costs both for the borrower & lender as well as broker &/or lender fees on top of a higher interest rate.