Generally, the very first step in the journey to purchasing a home is to get a pre-approved mortgage. A mortgage pre-approval can be had in about 24 hours once all of the appropriate income and other documents are produced. Getting a pre-approved mortgage has the following benefits:
- A pre-approved mortgage lets you know the maximum amount a lender will lend to you towards the purchase of a home and what your mortgage payments will be, thus, allowing you to narrow down your search criteria.
- A pre-approved mortgage locks in your mortgage rate for up to 120 days to the maximum rate the lender can charge. This means if rates go up, you benefit from your locked-in lower rate. Conversely, if rates should go down, you will benefit from the new lower rate.
- It gives prospective homebuyers an advantage in the home bidding process. This is especially true for when the real estate market is termed a sellers’ market (sellers are receiving multiple offers for their homes). Very often, sellers will prefer to deal with a buyer who has a pre-approved mortgage over a buyer who does not – even when a slightly lower bid is placed by the buyer with the pre-approved mortgage!
During a “hot” real estate market, you may find that realtors will also prefer to work with buyers who have a pre-approved mortgage. Therefore, primarily for these reasons, getting a mortgage pre-approval is very often considered the first step in purchasing a home. Before starting your journey, we encourage you to read our blog post on 5 Tips to a Sleep Easy Mortgage.
An important point to note about mortgage pre-approvals is that they do not guarantee that the lender will give you a mortgage for the full pre-approved amount. This will depend to a large part on the subject home’s appraised value, your down payment amount, and the property type e.g. owner occupied vs. rental.
We invite you to contact us or schedule a complimentary consultation with a Sleep Easy Financial mortgage strategist to start your mortgage pre-approval journey today!
Sleep Easy Financial, through its association with Dominion Lending Centres, has access to 50+ lenders including the big banks, credit unions, and trust companies.