What can break a mortgage pre-approval

What does each change cost your maximum?

For a $120,000 household with $60,000 down and $400 of other monthly debts, at 4.12% (maximum price today: $605,100), offering $550,000:

Each line is tested alone. Two at once compound: a car loan and a rate rise together hit harder than either. CIBC's pre-approval page says changes to your credit history between pre-approval and final approval could affect the amount you can afford.

What if the appraisal comes in low?

Lenders lend against the lower of the price and the appraised value. If the appraisal comes in 5% under a $550,000 price, the lender lends the same 89% of the lower value, so you'd need about $24,500 more cash. A financing condition gives you time to bring the cash, renegotiate, or challenge the appraisal; see what to do about a low appraisal on Revalued.ca.

Does a job or income change break a pre-approval?

Lenders usually re-verify employment shortly before funding. A new job can mean a new probation period (many lenders want you past it, often 3 months, though practice varies). A move from salary to commission or contract work can mean the lender averages two years of income instead of using your salary. A 15% drop in household income, in the example, cuts the maximum by $81,100.

Can a credit score drop break it?

A missed payment, a new account or a maxed-out card can lower your score before the lender's final check. For an insured mortgage CMHC requires at least one borrower with a score of 600; lenders price their best rates for higher scores. Keep balances well under their limits and set every bill to autopay until closing.

What if the lender can't trace your down payment?

Lenders verify where your down payment came from, typically with about 90 days of statements. Large unexplained deposits cause delays; gifts need a signed gift letter and proof of transfer; money moved from abroad needs records at both ends. Don't move the down payment between accounts in the weeks before closing without keeping the paper trail.

What should you avoid until closing?

1. No new loans, cards or financing, and no co-signing.
2. No job change, unpaid leave or switch to commission without asking.
3. Keep every payment on time.
4. Leave the down payment in place; document any transfer.
5. Watch the rate-hold expiry against your closing date.

What happens when several changes stack up?

Each breaker above is tested on its own. In real life they arrive together: a new car loan the same month rates rise, or a job change that trims income just as a hold ends. The engine reruns the stress test with the changes combined, for the same $120,000 household with $60,000 down on a 30-year insured mortgage.

Combined changes cost more than the sum of their parts would suggest, because the rate rise also raises the qualifying rate on the new debt. That's why lenders re-check everything before funding, and why one quiet month between offer and closing is worth more than any single trick.

How much room should you leave under the maximum?

An offer at the very top of your pre-approval leaves no room for anything to go wrong; a 10% cushion absorbs most single surprises. Test your own offer with the what-could-break-it tool, which now takes your amortization and first-time-buyer status.

Should you tell your lender when something changes?

Yes, and before it shows up on their own re-check. Lenders usually pull credit again and confirm employment shortly before funding. A change they discover themselves looks worse than one you raised, and some changes can be fixed if there's time: a larger down payment to offset a new debt, a co-borrower, or a smaller mortgage. A change discovered on the last day can't. If you're unsure whether something matters, ask your lender or broker in writing; the answer is cheap, and the alternative can be a failed closing with a deposit at risk.

The same applies to good news. A raise, a paid-off car loan or a gift that arrives early can raise the amount you qualify for, but only if the lender sees the documents before it issues the final commitment.