Although Not Mandatory, Mortgage Pre-Approvals Are A Good Idea
Wednesday Nov 06th, 2019
Taking the important step of getting pre-approved for a mortgage affords you knowledge and confidence; you’ll know in advance approximately how much financing you qualify for, which will give you peace of mind allowing you to focus on your home search.
When you meet with the mortgage specialist at your bank, or with a mortgage broker, if there is anything you don’t understand, you need to ask. This is not an area to take chances or to be shy. This is the time to make sure you understand what you need to do in order to buy a home.
When you make an offer to purchase a property contingent on you qualifying for a mortgage you can sometimes have as little as 5 banking days to put it together. That is NOT the time for surprises or affordability factors to come up.
Make sure you are honest with your lender. This is so important. Disclose all income and all expenses. This includes any spousal support (received, or paid), child support (received, or paid), outstanding personal loans that may not display on your credit report, any government money outstanding (taxes, fines), everything that shows a full picture of your financial situation.
You may be asked to provide documentation to support your claim for income. This may include a copy of your separation agreement, or letter from your spouse (whatever documentation you provided to the CRA to claim the spousal support) if you are divorced. So be prepared for this.
If this is your first time buying a home, or if you are buying a home for the first time after bankruptcy or divorce, the whole process can feel intimidating. It's understandable! Financing your home is the biggest financial commitment you will ever make.
The type of mortgage you choose really depends on your own personal circumstances, preferences, and comfort level. There are many products and services available in the industry today, so be sure to take your time and explore all your options. Your mortgage broker or specialist can walk you through a number of different scenarios so you can see exactly what each will cost you.
Pre-qualifications are a good idea if you want to make an informed decision, but don't rely on them for qualification.
You'll need to qualify your mortgage against a specific property before you can know if you can secure lending or not.
Speak to your local mortgage specialists and brokers for more information.