By Jeremy Davis
Winnipeg and its surrounding areas are currently experiencing a fast-moving market where buyers who diligently prepare are better positioned for success in purchasing their next home.
This article seeks to highlight one of the many ways a REALTOR® can assist you in getting across the finish line and into your next home. As knowledgeable and trusted professionals, REALTORS® work with a team of experts in their fields and can help guide you on important details such as what you need to know to qualify for a mortgage.
I was able to connect with Theo Kyriakopoulos, who is one such expert. Theo is a seasoned mortgage professional of 20+ years who has a career that spans executive-level mortgage experience within financial institutions to his current role as a national Winnipeg-based Mortgage Broker with Mortgage Architects. In his work with clients purchasing homes, Theo collaborates with REALTORS® to bridge the gap of the unknowns on how to successfully qualify for a mortgage.
Theo, what does it mean to be “pre-approved” for a mortgage and why is it important?
A mortgage pre-approval is a preliminary assessment by a mortgage broker or lender of how much money you may be able to borrow to purchase a home. It’s based on your income, debts, credit score and financial documents. With a pre-approval in hand, you get:
• Certainty on your financial positioning and a clear price range to guide your house hunting.
• An interest rate hold (typically for 90–120 days), which protects you from rising rates while you shop.
• A better sense of what your monthly payments will look like.
• Increased credibility with sellers, especially in competitive markets like what we are experiencing today here locally.
What is most important to understand about how mortgage qualifications work?
Although lenders may require specific information depending on the individual(s), there are generally five key areas a buyer needs to understand that will be reviewed in the application process. They are: (1) income, (2) credit check, (3) downpayment, (4) documentation and (5) other considerations.
How does household income impact the mortgage qualification process?
To put things into perspective, about five years ago, many homebuyers could qualify for a mortgage of roughly five times their gross annual household income. Today, that number is closer to four times income, depending on the interest rate and debt levels. For example, a household earning $100,000 per year might now qualify for a mortgage of around $400,000.
One of the main reasons for this shift is the federally mandated mortgage stress test, which requires lenders to assess whether borrowers can still afford payments if interest rates were to rise significantly. This means you must qualify not at the rate you’re offered, but at a rate that’s 2% higher — or at a minimum qualifying rate set by regulators (currently 5.25%), whichever is higher.
Your response on income is interesting; are there other factors about income that might come into play?
Yes. Lenders want to see stable, consistent income and can only use income claimed on your taxes. To help the process go smoothly, having your documents ready is key. While requirements vary slightly by lender, here’s a general guide based on your employment situation (note this may not be exhaustive):
If you are employed by a company:
• Photo ID (driver’s license or passport);
• Most recent pay stubs (usually last 2 pay periods);
• Letter of employment stating your position, start date, and salary/hourly rate;
• Last two years of T4 slips;
• Last two years of Notice of Assessment (NOA) from CRA (to confirm no tax owing);
• Recent bank statements (to show down payment and closing costs).
If you are self-employed:
You’ll need more documentation to show consistent income and financial stability. Typically:
• Photo ID;
• Two years of full personal T1 Generals (tax returns);
• Two years of CRA Notice of Assessments (NOAs);
• Business financial statements (if incorporated);
• Proof of business registration or incorporation;
• Bank statements showing down payment funds;
• Sometimes: GST/HST returns or client contracts to support your earnings.
Keep in mind, lenders often assess self-employed income more conservatively, so getting organized early is vital.
If you are retired:
Without employment income, you can still qualify for a mortgage, but the focus shifts to your retirement income and assets. Documents to gather include:
• Photo ID;
• Canada Pension Plan (CPP) and Old Age Security (OAS) statements;
• Pension statements from other sources (e.g., company pensions);
• Investment account statements (RRSPs, TFSAs, annuities, etc.);
• Recent bank statements (to show liquid assets);
• Tax returns and NOAs for the past two years.
Lenders will assess whether your fixed income and savings are sufficient to support the mortgage you’re applying for.
What about the other factors you mentioned earlier such as credit check, downpayment and other considerations?
First, downpayments. The minimum downpayment on a purchase is 5% but if you put down 20% or more, you’ll save yourself some costs and gain a little more flexibility in terms of the kind of mortgage you have. Anytime you put down less than 20%, the financial institution needs to be backed by companies such as CHMC, Sagen or Canada Guaranty. This will add a small premium on top of your mortgage and limits your choice of mortgage products.
For credit checks, your score is very important. Variables that impact your score include whether you’ve claimed bankruptcy, how often you go over your credit limit, or if you make payments late. Lenders will also look at how much of the credit one is utilizing, if they possess more than one credit card or lines of credit, and history of payment on items like phone bills. Best practice is to always pay your bills ahead of time, don’t go over the credit limit and make sure your balances are regularly reviewed in the event of errors. You can help your credit score by making payments on time and not using more than half the limit on any line of credit.
Lastly, life situation is an important factor. For instance, it matters whether you’re married, separated or divorced because the financial circumstances of those situations can have an impact. It is crucial to disclose this information from the beginning with your REALTOR®, Mortgage Broker or Lender to help guide you on important next steps.
Theo, thank you for helping to navigate the homebuying landscape with confidence, preparedness and focus. Often, people don’t know what lenders expect, and how to move forward quickly and efficiently when the right home comes along.
Jeremy Davis is the Winnipeg Regional Real Estate Board’s Director External Relations & Market Intelligence.