The ins and outs of mortgage pre-approvals

When you’re house hunting, it’s important to know the amount of mortgage you qualify for, how much your monthly payments will work out to, and what your down payment and closing cost will be. It’s also a plus if you can get a rate hold for some period of time. Getting a mortgage pre-approval ensures that you can shop within your price range, and you don’t have to worry about rates rising. As well, a pre-approval shows both realtors and sellers that you’re a serious buyer.

But, not all pre-approvals are the same!

Heads up! A mortgage pre-approval is not the same as a guaranteed mortgage approval, Some are just a simple rate guarantee, subject to lots of conditions.  Getting pre-qualified – through an experienced mortgage broker or a really thorough mortgage lender or bank – is much better.  To be truly pre-qualified, you need to submit your application, plus all your income and down payment documents for review, in addition to getting your credit checked.  Even then, it’s still a good idea to have a financing condition in your purchase offer. This is because your property will still need to be okayed by the mortgage lender.

Beware making changes to aspects of your application

Be sure to not make significant changes after getting the pre-approval.  Changing jobs, getting new debt – credit cards, loans, or buy-now-pay-later payment plans, missing payments on mortgages, loans or other liabilities, co-signing a loan for someone else, or using your down payment money to pay down another debt?  All of these can jeopardize your ability to get a mortgage.  Wait until after you’ve taken ownership of your new place before doing any of this.

Want to chat with a mortgage professional?

Get in touch with me!  I’d be happy to help you get off on the right foot in your homebuying journey.

For more info on first-time homebuying and pre-approvals, click here to read more.

Downpayment

Photo [c] Mix and Match Studio for vecteezy.com