Receive Your Pre-approval Now!
Regardless of the types of home loans you may be interested in, home improvement, home upgrades, construction of a home, or buying another property, being pre-approved makes it all the more certain that your dream of homeownership will become a reality. That’s because it eliminates a lot of uncertainty over whether you may or may not be eligible for a mortgage later on, once you’ve decided which home to buy.
But your pre-approval doesn’t just remove uncertainty about your home loan finance – it also provides you additional certainty around:
- The total amount of mortgage that you are approved to carry;
- Clear visibility into what your bi-weekly, monthly, quarterly or annual payments (depending on your choice) will be; and
- The interest payment rate and options for paying your instalment
In short, as a future homeowner, you are left in no doubt about what your future financial obligations will be.
Benefits of receiving pre-approval
While not always mandatory, getting pre-approval is one of the best decisions you can make. As a financially savvy prospective homebuyer, whether it is for financing new home construction or buying an existing home, pre-approval puts you in a much better frame of mind. As a result, you can immediately commence hunting for that dream house with confidence!
Applying for a mortgage isn’t something that you can do on the spur of the moment. To be successful, it takes time, and requires that you intimately understand the entire process. If you go into the process without understanding what it entails, unscrupulous home mortgage companies can take you for the proverbial ride around the moon. You could lose more than just your chance to qualify for a mortgage. You could lose your entire savings!
Many prospective sellers too love dealing with prospective buyers who are pre-approved. There’s nothing more frustrating for a seller than spending days (or even weeks) negotiating a selling price; only to find that the buyers isn’t eligible to carry a mortgage to match!
In fact, in some cases, sellers may even be willing to reduce their price if they are certain that the buyer is financially “solid” – as demonstrated by their pre-approval status.
If you are interested in getting a loan, but are unsure about what that entails, then this article will help get you ready.
Taking the first steps to pre-approval
Even though you have not formally put in a mortgage application to your financial institution, you can start preparing for it now! While home-ownership is a long-term objective, it needs you to pay great attention to your personal financial status immediately. Waiting to review your finances until your mortgage application date is definitely not recommended.
The two immediate things you can start working on to get yourself ready for pre-approval are:
- Start establishing a stockpile of savings. It doesn’t need to be a massive amount; but it does need to be sufficient enough to prove to your home loan bank or alternate financing institution that you have the financial ability to be a homeowner
- Make sure you have your debt situation well in hand! If your debt far outweighs your savings, or the amount of money you owe is far out of proportion to your income, lenders will think twice before pre-approving you for a home loan
Both of these pre-requisites need time to establish, so the earlier you start working on them, the better are your chances of getting into great financial shape. Procrastination in dealing with these core requirements could potentially put you in jeopardy of not being pre-approved.
To ensure that your home financing process moves smoothly, whether it is a house improvement loan or other type of mortgage financing, you need to have the following documents/information readily available:
- Copies of at least two recent pay checks or pay stubs
- Recent Bank Statements spanning at least two recent periods (months, quarters)
- T4’s from your employer
- Social Insurance details
- Relevant Tax information
- Copies of identification (e.g. Driver’s license, Passport or Immigration documents). Usually, photo-id and proof of address/residence is mandatory for such transactions
Often, pre-approval applications are looked upon favourably if you also provide a letter from your employer attesting that you are a ‘solid staff member’ and are recommended for preapproval. However, this is not a pre-requisite at all.
If you want you’re preapproval for construction mortgage loans or other home financing to move even quicker, it is best if you start creating electronic copies of all of the above documents at the earliest. While most institutions will ultimately request attested hard-copies originals or true copies when finalizing the transaction; electronic copies make it easier to upload or send immediately so that the pre-approval process is fast-tracked.
Being financially savvy means that your house hunting can start immediately, knowing with confidence that you are already pre-approved for a mortgage!
Mortago mortgage brokers are the lender of choice for commercial and residential mortgages. We serve clients not just in Toronto and the surrounding areas, but right across the GTA.
We have a broad range of residential and commercial financing experience, with our teams specializing in every aspect of each transaction. Whether it is loans for home improvement, or financing for constructing or buying a new home, our objective is to provide our clients with exceptional mortgage planning services. We look forward to serving you with pleasure!