6 Smart Ways to Get Pre-Approved for a Higher Mortgage Amount
So, you’re ready to buy a home—cue the Pinterest boards and Zillow deep dives! But wait… your pre-approval amount came in lower than expected. Gasp! Before you spiral into an existential real estate crisis, take a deep breath. There are plenty of ways to nudge that number up and get closer to your dream home. Let’s dive into five fun (yet highly effective) ways to boost your pre-approval amount!
1. Lower Your Debts Like a Financial Ninja
Your debt-to-income (DTI) ratio is like a seesaw—too much weight on the debt side, and lenders start sweating. If you want that loan amount to climb, start chopping down your debts, especially those high-interest ones (looking at you, credit cards!).
Ninja Moves to Try:
Pay off small balances on multiple cards instead of focusing on just one big debt. Yes, the debt snowball idea is a great way to tackle your debt, but we are looking for credit utilization to be below 30%!
Ask for a limit increase (but don’t use it!) to instantly improve your utilization rate.
Consider a balance transfer to a 0% APR card to tackle debt faster.
2. Boost Your Credit Score Like It’s a Video Game
Think of your credit score like a high score in a game—the better it is, the more rewards you get (aka, loan approval power)! Lenders love high scores, and a bump in your credit score could mean a bump in your loan amount.
Power-Ups to Try:
Get added as an authorized user on a responsible person’s credit card (instant history boost!).
Dispute any errors on your credit report. Even small mistakes can drag down your score.
Start reporting your rent payment. Utilizing services like Borrowell to report your rent payment (you're making on time every month anyways, right?) can add a boost to your score via on time payments.
3. Tweak Your Mortgage Terms Like a Pro
Your mortgage terms can impact how much you’re pre-approved for. With interest rates fluctuating, a fixed-rate loan may qualify you for more than a variable-rate loan due to the Stress Test. Work with your Mortgage Agent to see which options stretch your buying power the furthest.
Smart Tweaks to Consider:
Compare fixed vs. variable rate loans to see what gives you the best shot.
Look into longer loan terms (30 years vs. 25) for lower monthly payments and increased approval amounts.
4. Drop a Bigger Down Payment Like a Boss
A larger down payment means less money you need to borrow, and in some cases, lenders will approve a higher loan amount if they see you’re bringing more skin to the game. Plus, it lowers your monthly payments—win-win!
Ways to Stack That Down Payment:
Raid your savings (but leave an emergency cushion!).
Check if you qualify for down payment assistance programs.
Ask family about a gifted down payment—because sometimes, Mom and Dad want you out of their basement.
Don't forget, you can borrow up to $35,000 from your RRSP to add to your downpayment.
5. Tag in a Co-Signer Like a Tag-Team Champion
If your income or credit score is holding you back, a co-signer can add financial muscle to your mortgage application. A co-signer (like a parent or close friend) with a solid income and great credit can help you qualify for more.
But BEWARE!
A co-signer is 100% on the hook if you miss payments.
Late payments affect their credit score too.
Relationships can get awkward if money issues arise—choose wisely!
6. Increase Your Income Like a Hustler
Lenders love to see steady, reliable income—it’s their way of knowing you can handle those monthly mortgage payments. If your current salary isn’t getting you the loan amount you need, it might be time to level up your income game.
Ways to Boost Your Income:
Pick up a side hustle (freelancing, tutoring, consulting—you name it!).
Ask for a raise at your current job (you deserve it!).
Start a small business—but keep in mind lenders usually want to see at least two years of steady income before they’ll count it toward your mortgage application.
Remember, increasing your income isn’t just about the quick cash—it’s about showing lenders that you have a reliable and ongoing source of funds. So get to hustling and keep that income on the books!
Final Thoughts: Get That Dream Home!
Increasing your pre-approval amount isn’t just about wishful thinking—it’s about strategic moves that put you in the best financial position. Take a step back, tweak what you can, and remember: just because you qualify for more doesn’t mean you should max it out. Be sure you can comfortably afford your new home while still enjoying life (yes, that includes brunch and travel!). Managing a monthly budget will show you how much you technically can afford. So it's still recommended that you buy within your financial means.
