THE IMPORTANCE OF MORTGAGE PRE-APPROVAL
Thursday Nov 19th, 2020
Looking at homes is exciting but before you get carried away, it’s important to sort out your financing as it can save you thousands of dollars and provide you with valuable peace of mind.
Getting pre-approved is easy! A mortgage lender will review your finances and credit history in order to determine the maximum amount they can lend you. Depending on your situation, they may even be able to make recommendations that could provide you with more favourable options.
In addition, most lenders will also secure the current interest rate for a certain time period to protect you in case rates suddenly increase. This small, easy step can potentially save you thousands of dollars but if you leave it till the end, you could miss out so it’s important to be proactive!
At any rate, it’s important to set a budget before you start home shopping because if you start by looking at homes above your price range, it’ll be really hard to readjust to less expensive homes later on.
There are various online tools that can estimate what you qualify for but it’s best to talk to a mortgage specialist to get a more accurate assessment. That way, they’ll be able to review your finances and look into your credit history in order to structure your application in the best possible light.
A mortgage specialist will also explain the various options associated with mortgages. Interest rates are important but there are many other items to consider such as the type of mortgage (fixed/variable or open/closed) as well as the loan's duration. You’ll want to be aware of all the options so that you can determine which one best suits your current and future needs.
Finally, a major advantage of mortgage pre-approval shines through when it comes time to make an offer on your dream home! Unconditional offers are significantly more attractive to sellers and in the case of multiple offers, it could mean the difference between getting the home of your dreams or losing it. If you still need to make the offer conditional on financing, you'll at least be able to attach the pre-approval to your offer.
Planning ahead and getting a mortgage pre-approval can save you thousands of dollars, eliminate countless hours of stress and give you a stronger negotiating position when it comes time to make an offer. Getting pre-approved is easy, there’s no obligation and it doesn’t cost a cent, so please reach out if you have any questions!