5 Dos and 4 Don’ts for Mortgage Pre-approvals

1. 5 Dos and 4 Don’ts for Mortgage Pre- approvals – Mortgage Mojo

2. Homeownership is a dream for most of us here in Canada. For first time home buyers, even seasoned buyers, the process can be confusing. However, here is a picture that simplifies the process for you. Getting a mortgage is indeed the first thing we will need to do, because when only when home finance is place will our offer be accepted by the sellers. Without finance, we cannot get that property, unless you are purchasing with cash.

3. Here are 5 practical tips to get pre-approved 1.Apply for a mortgage pre-approval first A lot of people starting off by contacting a realtor and then viewing houses. It is a common practice, yet not the most efficient way to buy real estate. The first thing is to apply for a mortgage pre-approval. After your offer gets approved, with a pre-approval in hand, you can close as soon as possible, rather than spending extra time applying for a mortgage. Pre-approvals also helps to know your affordability as well as mortgage repayments. You can do an estimation on our website with the calculators. The fact is, lenders is only comfortable lending out a certain amount, knowing that in the first place keeps you on the properties that you can actually afford. How long will it take to get a pre-approval? Once the documentation is ready, it can be completed within just few hours. Contact us today and our consultants will get in touch with you. 2.Find the best deal Although we all want to get the lowest rates, mortgages are about the overall solution, not just the rates. Find a broker who puts your interests first, takes time to evaluate your situation, and only recommend reasonable products to help you. Once you have received an offer, input them on our calculators and see if the repayments are within your budget. If anything seems to be out of place, contact our mortgage brokers and see how we can adjust. How long is a pre-approval good for? It’s usually 4 months with our A lenders, not B lenders do not offer pre-approvals, in fact. 3.Collect your documents Getting the paperwork might take longer than most people think, so start preparing early. For your convenience, we have a checklist for you. Generally speaking, these items are required: Driver’s License, Passport, Permanent Resident Card. Health card is not acceptable for us. Bank statement. To show that you have your down payment ready and can service the mortgage moving forward. Proof of Income. Paystubs from employers; NOA from Canada Revenue Agency if you’re self- employed Your debt information. This can be found on your credit report from either Equifax and TransUnion. Lenders will need to check your debts before lending you funds.     4.Stay in touch with your broker We do aim to be highly efficient while helping you, but different lenders might require updated documents or different ones. Being in touch speeds up the process. Our brokers have flexible working hours and will accommodate your busy schedule. 5.Read the pre-approval document

4. Once you receive the pre-approval letter from the lenders, make sure to read it. Check the amount, the interest rate, the payment frequency, the pre-payment privilege and etc. Contact our brokers if you have any question. Here are 4 mistakes to avoid for mortgage pre-approvals These mistakes are major, recovering from them can be time consuming and costly. Make sure to avoid them 1. Don’t max out, stay in your budget. The lenders might approve you for an amount that you don’t really need. Do your calculation with our calculators or contact our brokers to see if the mortgage repayments are within your budget. Impulsive spending is a killer to financial health. Besides monthly mortgage repayments, there are other homeownership costs, such as property tax, utility bills, heating costs, general maintenance and etc. The keyword here is to budget, and our brokers can help you with that. 2. Don’t do the big buys Once you have obtained the pre-approval, your lenders will honor this commitment till you close. However, during this period, do not use debts to purchase big items. The reason is, once your debt service ratios (GDS and TDS) change, the lenders have rights to revise the pre-approval. Closing without a mortgage is a huge challenge, be sure to minimize spending before you take possession. 3. Don’t apply for new credits Don’t apply for new credit cards, installment loans or line of credit after getting this pre-approval. The reason is, once you obtain a loan, your debt service ratio (GDS and TDS) will change, risking you losing your approved mortgage or even loan rejection. 4. Don’t quit or change jobs Your current workplace isn’t the best, we get that. But don’t change your job yet. As you have applied for a mortgage with your incomes from your current employments, going to another employer or becoming self-employed will turn the deal off. The reason is lenders are now enduring more risks, as the borrowers might not have enough income to service the mortgage. The point here is, if you really want to change your job, do it after you take possession. Learn more at https://www.mortgagemojo.ca/