Mortgage Pre-Approval Essential in Today’s Market

More than ever, a mortgage pre-approval just makes sense. Even though a pre-approval is not a guarantee the lender will come through when you have an actual purchase, there are many benefits. (1) Protect yourself from further interest rate increases for the next 90 to 120 days. At the very least you will pay no more than the rate on your pre-approval certificate, and if your lender’s rates are lower when you have a live purchase, you will enjoy the lower rate. (2) Having a mortgage pre-approval certificate for your Toronto mortgage allows you and your real estate agent to stand out from other offers in a crowded purchase process. Even if you ask for a short (say 2 days) condition of financing clause, the seller will take great comfort from your certificate, and will be less inclined to think they are wasting precious days holding your offer. (3) Being pre-approved for your Toronto mortgage gives you a clear idea of how much mortgage you will actually be approved for. With the introduction of stress testing mortgage applications as well as tiered mortgage rates, depending on your borrower profile, this is more important than ever and also harder to predict than at any time previously. No Big Changes After a Mortgage Pre-Approval A pre-approval is granted based on your financial, employment, credit and life circumstances at the exact moment in time you asked. It stands to reason that if something significant changes between then and the time you actually make an offer to purchase, your approval could very well fly out the window! But we still see this sort of thing all the time. I guess no one is telling prospective home buyers this hugely important fact. Mortgage Pre-Approval Does Not Last Forever Of course, we all know that nothing lasts forever (sigh), but no one wants to find out that the timer on their pre-approval is about to expire, and with it, a much preferred lower interest rate. Contact To have you or your clients pre qualified!  416-629-5363 Courtesy of: Ross Taylor