WHAT IS A MORTGAGE PRE-APPROVAL?
A mortgage pre-approval lets you know the maximum amount you can afford to spend on your new home and what the monthly payments will be.
Mortgage pre-approvals are also:
- Free – it doesn’t cost you anything to apply
- Non-committal – you do not have to stick with the lender who pre-approved you
- Helpful – use your pre-approval as a way to determine if you can actually afford to buy a house and pay your mortgage
WHY DO I NEED TO GET PRE-APPROVED?
Getting pre-approved for a mortgage will let you know what you can afford. This way you can only look at homes in your price range; saving you and your Real Estate Agent time.
Also, pre-approvals indicate to real estate agents and sellers that you’re serious and ready about buying and when you make an offer on a home it shows that you will have no problem financing your purchase.
WHAT DO I NEED TO GET PRE-APPROVED?
In order to get a mortgage pre-approval you will need to meet with a mortgage broker. Your broker will ask you several questions to figure out what you can and can't afford. Your credit report will be pulled to ensure that you have an optimal credit score and your broker will need to know the amount you wish to put down for a down payment on your future home. When you visit your broker you will be asked to provide supporting documentation to prove you’re a good candidate for a mortgage.
You will need to bring:
- - Government issued ID (ie- driver’s license to show that you’re really who you say you are)
- - Pay stubs and/or a letter from your employer to prove your income
- - If you are self-employed you will need to bring a notice of assessment
- - Recent financial statements from your bank accounts to show you’ll be able to afford monthly mortgage payments and a down payment on the property
- - Disclose any debts such as credit cards, lines of credit, student loans, car leases/loans, personal loans, spousal, or child support payments.
Don't go into the the process of purchasing your new home un-pre-pared. Follow my above tips and you will find the experience will be a lot less stressful.