Pre-Approval
Pre-Approval for a mortgage informs you of how much you can afford before you begin shopping for your home. Once pre-approved, your realtor will have a better idea of what your maximum purchase price is (keeping you within your budget)!
Mortgage Pre-Approval
Pre-approval - it’s exactly what it sounds like!
In order to obtain a mortgage, you must be approved by a lender. In order to buy a home, you (likely) will need a mortgage. So, how do you know just how much you can afford?
Purchasing A Home-Sweet-Home
House-hunting is one of the most exciting forms of ‘shopping’ an individual can experience in their lifetime. It’s a LARGE commitment which requires a LARGE investment of money.
But, there’s a catch.
Picture this: you’re at the mall shopping for a new outfit to wear to your Uncle Jay’s wedding. You check every price tag because you know exactly how much cash you are carrying in your wallet. If you find an outfit you reeeeally like which costs more than the cash you have available, you can always pay for it on credit (because you know what your maximum credit limit is). Useful!
Now, picture this: you’re ready to purchase a home and you’re skimming over listings online. You think you’ve found your dream home, but wait a second, how much can you afford? You don’t know? Not so useful!
This is why it's highly recommended to get pre-approved; pre-approval will inform you of the maximum amount you should budget for when shopping for a home.
Don’t Set Your Eyes On A Prize You Can’t Afford
Getting pre-approved for a mortgage will provide clarity for what price range you should be comfortably considering for a home. Keep in mind that your pre-approved rate will likely be close to the maximum you can afford, so it’s important to ensure that the homes on your radar are within your budget.
Knowing the amount you’re pre-approved for can help narrow your house-hunting search, save you valuable time, and set you up for SUCCESS rather than disappointment!
Seeking Approval (And That’s Okay!)
Whether you’re a first time home buyer seeking approval on your first mortgage, or you already own a home and you’re looking for another property to add to your home equity, being pre-approved is not only acceptable, it’s actually helpful!
Speaking with a licensed mortgage broker is a great first step in solidifying this process. We’d love to assist you with giving you a rough idea of what you pre-qualify for, and if you’re serious about getting a pre-approval from a lender we’ll work for you to gather all necessary documentation and create a case on your behalf!
Just remember, there are some considerations the lenders assess during their preapproval process. They may require you to submit:
- A Credit report (checking for bad credit to assess whether or not you’re high-risk)
- Documents proving your recent income and financials (this helps to avoid mortgage fraud)
- The size of your down payment
- Your employment history
- Your debts including any revolving lines of credit or installment loans
Can I Submit This Information To A Bank For Pre-Approval On My Own?
You definitely can, but it may leave you at higher risk of not submitting a document which could help your case. This is why working with a licensed mortgage broker can help get you closer to your dream home. We are experts in the mortgage industry and are aware of what the lenders are looking for – this means we can help you submit crucial documents and information which can increase your borrowing power!
Banks work for themselves; they’re busy, tied to strict policies, and often can only offer you the rates THEY have available. So, when it comes down to seeking a mortgage between banks or a mortgage broker, it’s a no brainer. Choose the one who puts YOU first and can negotiate the best rates.
How Can I Increase What I’m Pre-Approved For?
There’s often a misconception that as long as your income is high, you can be approved for an expensive home. This would be nice, but there’s a lot more to consider than just that!
These tips can help to increase your pre-approval amount:
- Provide a sizeable down payment is helpful because it is a large contributor to determining how much you can be approved for. There are minimum down payment requirements which means having a high income isn’t enough on it’s own
- Have an EXCELLENT or VERY GOOD credit score
- If you’re self-employed, provide evidence of your financial claims including your income statements and any recent Notice of Assessments
- Your debt-to-income ratio should generally be 44% or less
- You can prove you have a stable job with consistent income
Easier said than done, but seek avenues to increase your income! Haven’t received a raise in a while but feel like you deserve it? Ask for one! Gaining greater access to finances can help increase your down payment, therefore affecting your mortgage payments by influencing both your potential amortization period, available rates and overall terms
Work with a knowledgeable licensed mortgage broker who can pay attention to application details and ensure no pertinent information slips through the cracks
I’m Ready To Get Pre-Approved, What now?!
Ready to start the journey? Follow these simple steps!
- Reach out to myself, Kyle Benzies (licensed mortgage broker)
- We'll have an easy, confidential chat; we’ll discuss some of your goals and work together to get the pre-approval process started
- I’ll create a file on your behalf to confidentially and securely collect necessary documents from you
- After all documents are submitted, I will assess them and provide you with a pre-approval amount
- Easy peasy, you can now begin hunting for the perfect home within your budget
- High fives all around!
***other conditions may apply to anything listed above. The information provided on this page should NOT be implicitly relied upon, and may not be 100% up to date. It's best to contact us for the most current conditions/program offerings for first time buyers***