The first step in the home buying process is to obtain a pre-approval from a bank or lender. A pre-approval is simply a rate hold, typically for 120 days. This allows you to shop for a home without the risk of interest rate changes. The pre-approval also provides you with a purchase price for which you can shop. One of our mortgage brokers will help you acquire the pre-approval so you are confident you have the best product.
The quickest and easiest way to get pre-approved is to fill out our online mortgage application. One of our mortgage brokers will contact you to ask any questions they might have and from there we can tell you exactly how much you can spend on your first home.
Mortgage Rate Guarantee
A Mortgage Pre-Approval guarantees an interest rate for up to 120 days, even if rates rise in the meantime. This protects you while you shop for a home.
If rates should drop before your mortgage funds are advanced, you will automatically receive the lowest rate during the 120 day period.
Get A Pre-Approved Mortgage Certificate
Before you begin shopping for your next home, be sure to acquire a pre-approval certificate from your broker. This will outline all the details of your mortgage including the rate guarantee and what you can afford. Always remember the mortgage pre-approval is not an official approval! You always need to make any offer on a home conditional to financing as the lender must complete the necessary underwriting to confirm your employment, down payment, and property before financing is officially approved.
Did You Know?
Many real estate agents may require you to get a pre-approval before they begin working with you. The pre-approval certificate is a great way to show your agent that you are a qualified buyer. The fact that you already have your mortgage financing arrangements in place indicates to prospective vendors that you are a serious buyer.
It gives you the security of negotiating a house price that falls comfortably within your budget. A mortgage pre-approval is absolutely free, with no cost and no obligation.
How to Qualify for a Mortgage
There are a few things lenders require to approve a client for a mortgage, these are as follows:
- Employment – Income is required to ensure you can make the payments. A full time permanent position with no probation period is required in most cases but if you have worked in a part time position for at least two years we can also use that income to qualify. Income that includes over time, commission, bonuses or self employed earnings must have a minimum 2 year history in order to qualify. Your income level will determine how much you can spend.
- Good Credit – You must be able to show you can manage money. A credit check will show us your score which is determined by how well you manage and pay credit cards, loans, and lines of credit. If you have late payments, collections, or other bad debts this will significantly hurt your chances at being approved. The lenders like to see a minimum 2 year history of credit with good repayment history.
- Down Payment – A down payment is very important when buying a home. If you have very good credit it is still possible to purchase a home with as little as 5% down payment. If you have poor credit a much larger down payment could be required (example: 20%). In most cases with good or average credit a minimum 5% down payment is needed and will allow you to qualify for best interest rates.
If you have solid employment, good credit, and a down payment, there is a good chance you will be approved for mortgage financing. The down payment can come from a number of sources including savings, investments, RRSP’s (HBP), or even a gift from an immediate family member.
Getting Started
The first step to acquiring an official mortgage pre-approval is to fill out our online mortgage application. Once you complete this form one of our mortgage brokers will contact you to complete your approval.