Mortgage pre-approval means that a lender has stated (in writing) that you qualify for a mortgage. They will specify the term, interest rate and amount you qualify for based on the documentation you submitted of your current income and credit history.

There are three benefits to getting a mortgage pre-approval:

1. It confirms the maximum amount you can afford to spend

People are always tempted to start their search at the top of their budget but it is important to remember that there will be additional fees. Closing costs can range from 1% to 4% of the purchase price. By factoring these into your budget, it can help you narrow down a home that is affordable and ensure future financial stability.

2. It can secure you an interest rate for 90-120 days while you shop for your new home

Getting pre-approved guarantees that the rate offered to you will be locked in from 90 to 120 days. This helps if interest rates rise while you are still shopping. However, if the rates decrease, you would be offered the lower rate.

3. It lets the seller know that securing financing should not be an issue

Lastly, having a pre-approval lets the seller know that you are able to make the purchase. This can be very helpful in competitive markets.

Once your pre-approval is in place, you’ll want to make sure that you do not jeopardize it. It is important that you don’t quit or change jobs, buy a new car, transfer large sums of money between accounts, leave bills unpaid or open up new credit cards.

If you have any questions or want to get your pre-approval started today, don’t hesitate to reach out to us at 604-552-6190 or by applying online here.