I apologize in advance if this sounds like venting, but here we go.....
Last week I had the pleasure of speaking with a member of the Canadian Military who was transferring to CFB Trenton with the air force. In early October, he had spoken with a 'lender' at a local credit union and obtained a pre-approval (or so he thought). Based on this approval, he then scheduled a house-hunting trip from Alberta (bringing along his family) to find a home in the Trenton area. A local realtor showed them over 30 homes in a 3 day period before settling on a place to make an offer on (which was accepted). Home inspection went fine, but after 5 days they were told they would need a co-signor or a larger down payment to proceed. At this point they gave me a call.
After spending only 5 minutes on the phone, sadly I was able to tell the gentleman with a high degree of confidence that his mortgage would likely never be approved (even with a co-signor) and that he should consider renting a house.
Why the difference? Even if a lender puts it in writing, a pre-approval really isn't worth the paper it is printed on if the individual granting the preapproval has no concept of what will and will not get approved at CMHC (or one of their private sector equivalents) as you always need the support of a high ratio insurer if you have less than 20% down.
The moral of the story? Consider a busy, experienced mortgage broker that can rely on hundreds of past transaction and years of experience in knowing what will and will not get approved. I always try to give my clients honest, direct advice as I have no interest in wasting either their time or mine. So if you are considering buying a home and need direct, honest advice (as well as a great rate), please give me a call.