Mortgage Information

How to get a mortgage

How a pre-approved mortgage can help you

Whether you’re planning the purchase of your first or fourteenth home, get a pre-approved mortgage from the lender of your choice or a mortgage broker. This step will save time, provide peace of mind and help your offer stand out from the pack in a multiple-bid situation.
My recommendation is to use a mortgage broker for three reasons:
1) There is no cost to the consumer
2) They have a variety of lenders available and can help you find the best fit for your circumstance
3) You only complete one application with one credit check, as opposed to inquiring with individual lenders.

A reality check

Your bank or mortgage broker will examine your current financial situation to determine how much you can afford to borrow, and give you a realistic idea of what your monthly payments would be. Rules and rates change all the time so getting current information is very important.

Not having a pre-approved mortgage can lead to unsuccessful bids due to financing surprises, leaving both the buyer and seller in an extremely disappointing situation. As well, in today's competitive market, pre-approval is essential and part of the preparation of a rock-solid offer. It’s worth it to take the time, which can be just a few minutes, to start off on solid financial ground.

With a pre-approved mortgage, you have an amount to have in mind while house hunting. Instead of scrambling to see every open house in the neighbourhood, you can focus your search to homes that fit into your predetermined price range. And by comparing similarly priced homes, you’ll be better able to gauge the value of each property and find the one that’s right for you.

Anyone who has experienced buying during a period of double-digit interest rates already knows the wisdom of obtaining a pre-approved mortgage with a locked-in mortgage interest rate. These are usually guaranteed for 90-120 days and, in the event that mortgage interest rates decrease during that period, will be lowered accordingly. Be sure to check this with your lender.

Locking in your rate protects you in case rates go up, so be sure to ask about it. For example, on a $100,000 25-year mortgage, an increase of 1% to the rate would add approximately $72 to your monthly payments. That’s over $800 in a year that could have gone towards something a little more fun, like a weekend getaway. Without a pre-approved mortgage, a sudden increase in mortgage interest rates could mean you no longer qualify for your dream home.

It’s easy

Whether you decide to use a mortgage broker, who will negotiate on your behalf to compare rates and terms from several financial institutions, or your preferred bank, the process of getting pre-approved is fairly straightforward. You’ll be asked to provide your financial information, including all assets, liabilities and proof of income as well as the amount you have available for a down payment.

A firm offer

Homebuyers with a pre-approved mortgage have the upper hand when they put an offer on the table. And it’s easy to see why. Having pre-approval demonstrates that you’re serious about purchasing a home—you’ve done your homework and have arrived prepared. It also officially addresses your ability to finance the purchase, which leaves no question in a seller’s mind that yours is a good offer.

After your offer is accepted, all that’s left for you to do is to send in the property and offer details, along with any other information requested, to your lender and your pre-approved mortgage will be converted into your actual mortgage in a matter of hours.

When it comes to buying a home, there’s no better way to approach a purchase than with the confidence and convenience a pre-approved mortgage provides.