Pre-Approval

What is it exactly?

Okay, so you know that you want to buy a house or condo, but you're not sure how much you can afford. A pre-approved mortgage is a way to find out what mortgage amount you qualify for. In addition, it cuts through much of the paperwork at the outset, making things easier after you find the property you want to buy.

How it works:

1. We take an initial application and submit it, with a credit application, to various lenders.
2. We receive a commitment back, pending other documentation.
3. We also send in other pertinent information: employment letter, Notice of Assessments, etc.
4. Lender responds back with a mortgage amount they will commit to - pending a purchase agreement you make on a property.
5. Your rate is held for 90-120-days from the time the pre-approval is issued. Should rates go down, you get the lower rate, if they go up, you still get to keep the lower rate.
6. Now you can find a property in a price range you know you have the financing to afford.

A pre-approval provides piece of mind and helps you narrow your property search. You know exactly how much you can afford and don't bother looking at property outside of your price range. It also gives you negotiating power if you can tell a vendor that you already have pre-approved financing in place - it adds weight to your offer.

Note: for clients putting less than 20% or less downpayment, a pre-approval does not include approval from the mortgage insurers (CHMC and GE). Generally, this is never an issue, but in some parts of Canada, or on properties where the value may be variable, this can be an issue. We are happy to explain in greater detail, so please feel free to contact us.