“Lets start at the very beginning, a very good place to start- when you read you begin with ABC” when you shop for a home you start…
With a pre-approval!
Julie Andrews sang it best- to begin your home ownership dream- you need to start at the beginning, and getting all your ducks in line is crucial to the success of your financing.
There can be an overconfidence in a pre-approval, so its important to understand what it is AND what it isn’t.
Pre-approvals are not a guaranteed approval- they are also non binding. Ultimately it is a pre-screening, over 4 of the 5 C’ of credit. The 5th C is collateral which is the property itself; there-in lies the distinguishing difference as an approval includes scrutinizing the property. Consider it more like a review or examination of how your application will present to a lender, and with it will become clarity on the strength and weakness within.
A pre-approval is helpful because:
- It clarifies the budget you have to work within, estimates a monthly payment and goes over some of the important details of the process.
- It requires you to gather your documents that you will need for financing to ensure any obstacles to approval can be delt with ahead of time. A pre-approval is a complete review of your income, down payment, financial history and debt servicing ratios.
If you have all your documents, a solid review by a mortgage professional and a great plan in place- it can make the mortgage process smoother, and more enjoyable!
- It will help when you put an offer on home! Sellers like to know that the interest buyers are fully pre-approved buyers because they are taking their homes off the market for a couple of weeks while the buyers complete the conditions of the offer.
- It can be used to put a rate hold in place for up to 120 days while you are shopping, this protects you from rising rates. Interest rates can change daily, we ensure you will receive the best rate in the market place once your file is considered “live”. “Live” refers to when a seller has accepted your offer and your application including paperwork is submitted.
Before you go out shopping- be sure to give Mortgage Sisters West a call. We love setting up our clients with success and we can’t wait to work with you!