What Can Derail a Mortgage Approval After You’re Already Pre-Approved?

A proper pre-approval allows you to understand your true borrowing capacity, identify potential issues early, and move forward with clarity instead of guesswork. It gives you time to address credit concerns, confirm income, and ensure your down payment is structured correctly before you’re emotionally invested in a specific property.

When I pre-approve a client, I complete a full underwriting review up front. Income, credit, debts, and down payment are assessed in detail so we know, with confidence, that the borrower qualifies.

So when a mortgage runs into trouble after pre-approval, it’s rarely because the borrower wasn’t qualified to begin with. Instead, it usually comes down to factors that can only be assessed later: the property itself, or changes that occur between pre-approval and purchase.

This article walks through what can still derail a mortgage approval (even when the borrower has been properly pre-approved) and how to avoid those issues.

A fully underwritten

pre-approval has limits

A fully underwritten pre-approval means your documents have already been reviewed and verified. Your income has been confirmed, your credit assessed, your liabilities accounted for, and your down payment source reviewed. In other words, we already know you qualify based on you.

What can’t be confirmed yet is whether the specific property you choose meets lender (and/or insurer) guidelines, and whether your financial profile remains unchanged right up until funding.

Those are the two areas where issues can still arise.

Changes to income or employment after pre-approval

Once you’re pre-approved, lenders expect your employment and income situation to remain consistent.

Even changes that seem reasonable can trigger a reassessment. Switching jobs, moving from salaried to contract work, reducing hours, taking unpaid leave, or starting a new role with a probationary period can all introduce risk from a lender’s perspective.

This doesn’t mean changes automatically derail a mortgage, but they do need to be reviewed before/if they happen. Making employment decisions without checking first is one of the most common (and avoidable) ways a file becomes complicated.

Taking on new debt between pre-approval and purchase

After pre-approval, your borrowing capacity is based on your existing debt obligations. When new debt is added, those calculations change.

This often happens when buyers finance furniture, purchase a vehicle, increase credit card balances, or use short-term payment plans. Even if your credit score remains strong, additional debt can impact your debt-to-income ratios and affect lender approval.

The issue isn’t whether the purchase feels manageable, it’s whether it fits within certain ratios at the time of final review.

Credit changes, even without missed payments

Credit is commonly re-checked before final approval or funding.

Late payments can cause obvious problems, but so can increased balances, new credit inquiries, or opening new accounts. Buyers are often surprised by this, especially if they haven’t missed a payment, but credit scoring is sensitive to utilization and activity, not just defaults.

The safest approach during this stage is to avoid any changes to your credit profile until after the mortgage has funded.

When the property doesn’t meet lender guidelines

Mortgage approval isn’t just about the borrower, it’s also about the property.

Certain property types, particularly condos and townhomes, are reviewed more closely. Lenders assess factors such as rental ratios, strata financial health, special assessments, insurance coverage, and overall marketability of the building. A borrower can be fully qualified, but still encounter issues if the property doesn’t meet lender criteria.

In other cases, an appraisal may come in lower than expected, which can create a financing gap that needs to be addressed. This is why property review is a critical step that happens after pre-approval.

Down payment issues that surface late in the process

Even when a down payment has already been reviewed, issues can arise if funds are moved or restructured without guidance.

Lenders must be able to clearly trace the source of funds. Last-minute transfers, incomplete gift documentation, or unexplained deposits can cause delays or additional scrutiny, not because the money isn’t there, but because it can’t be properly verified.

Consistency and transparency are key during this stage.

Why lenders still re-verify everything

Even when nothing appears to have changed, lenders still complete final checks.

Employment may be re-confirmed, credit may be pulled again, and bank statements may be reviewed. This isn’t a reflection of doubt, it’s a standard part of regulated mortgage lending in Canada.

A fully underwritten pre-approval confirms that you qualify. Final approval confirms that nothing has changed and that the property meets lender requirements.

How to protect your approval after you’re pre-approved

The best way to protect your mortgage approval is to maintain consistency and communicate early.

Avoid making financial changes, don’t assume something is too small to matter, and check in before making decisions that affect income, credit, or cash flow. Most issues that derail approvals are preventable when they’re addressed proactively.

A properly underwritten pre-approval puts you in a strong position. It allows you to shop with clarity, confidence, and realistic expectations.

Protecting that approval until purchase and funding is the next step!

As always, please reach out if you have any questions. Always happy to chat mortgages!

Nadia.