Mortgage Pre-Approval in Alberta
Lethbridge Mortgage Broker
What is a Pre-Approval?
Getting pre-approved is an important first step whether you are considering your first purchase, transitioning into a new home, or even renewing an existing mortgage.
A pre-approval means that a lender has stated in writing that you qualify for a mortgage based on your current income and credit history. It will specify a term, interest rate, and mortgage amount that you qualify for in advance of your home shopping. Pre-approvals are good for up to 120 days and will protect you from any interest rate increases that may occur at that time.
Trust us when I say that getting a pre-approval in place will make your whole buying experience much smoother.
Why Get a Pre-Approval?
A pre-approval will help you to answer the question “how much house can I afford” and will eliminate a lot of stress when you find the right home.
Before you meet with your Realtor and start house shopping, it is recommended that you have a realistic price range in mind. A pre-approval gives you a firm idea of exactly how much purchasing power you have and lets the seller know that you are serious about buying, giving you a little extra leverage while negotiating.
How to Get Pre-Approved
The amount of purchasing power you have is dependent on several factors. My mortgage professionals will ask you a series of questions relating to your specific financial situation, and you will need to provide some supporting documentation.
The key areas that I will look at for a pre-approval are credit score, down payment, income, and liabilities:
Credit
Credit scores in Canada range from 300 – 900. The higher the score, the better.
There is a credit score range that is required to qualify for a mortgage; however, it is dependent on your liabilities, down payment, and income.
Down Payment
How much money you are putting towards the purchase of a home and where those funds are coming from.
The minimum down payment required for a home purchase in Canada is 5% of the purchase price.
Income
This value should be the total of the household income if you are buying the property with a partner.
Additional sources of income may be included depending on the lender. This may include bonuses, tips, investments, rental income, support payments, child tax benefit etc.
Liabilities
What are your monthly expenses?
This could include rent, utilities, phone bills, credit card debt, auto loans, student loans, etc.
Applying for a mortgage pre-approval is quick, free, and does not commit you to one single lender. It does, however, prepare you for your new purchase and protect you from rising interest rates for up to 120 days, giving you lots of time to shop for that perfect home.
Mortgage Pre-Approval = Want to learn more about getting Pre-Approved for a Mortgage?
Purchasing A Home = Want to learn more about Purchasing a home?
Building A Home = Want to learn more about Building A Home?
Buying An Investment Property = Want to learn more about Buying An Investment Property?
Renew Your Mortgage = Want to learn more about Renewing Your Mortgage?
Refinance Your Mortgage = Want to learn more about Refinancing Your Mortgage? +
