Did you know that getting an income verified mortgage pre-approval prior to shopping for a home helps a potential home buyer in two very important ways? Firstly, a mortgage pre-approval helps potential home buyers streamline their search by providing a realistic price range and budget to work within. Secondly, a pre-approved mortgage can give a home hunter a potential leg up on the competition, as sellers are more likely to accept offers from a buyer who has already secured financing. A mortgage pre-approval (or online mortgage pre-approval) is a great way to show sellers that you're serious about your offer and interested in completing the real estate transaction.
What is a mortgage pre-approval?
In order to secure a pre-approved mortgage, you'll need to supply your mortgage broker with a few important pieces of information. This information is used to pre-qualify you for a mortgage and determine the amount of money you're qualified to borrow. During this process, home buyers should expect to provide their mortgage broker with a breakdown of their employment history and income information, a listing of assets and liabilities, and an approximate down payment amount. After a diligent analysis, the lender will be able to provide a rough estimate of the mortgage amount for which the buyer qualifies. Pre-qualification can be done over the phone or Internet for free. At this point, the lender will be able to provide you with more information on the various mortgage options and recommend a lending solution that's best suited to your situation. Interested in running some numbers on your own prior to applying for pre-qualification? Then check out FamilyLending.ca's free online mortgage pre-approval calculator!
The pre-qualification is just the first step in your mortgage pre-approval. In order to become officially pre-approved, you will need to complete a mortgage application and supply your lender with the necessary documentation to perform a check on your financial background and credit history. Once you have completed this step (don't forget, FamilyLending.ca offers a free, no obligation online mortgage pre-approval), your lender will be able to provide you with a specific mortgage amount for which you are approved. You'll also have a better idea of the interest rate you will be charged on the loan. With a mortgage pre-approval you receive a conditional commitment in writing that states the exact mortgage amount, term, interest rate, and expiration date.
A word of warning
It's important to note that a home mortgage pre-qualification and income verified mortgage pre-approval are not the same thing, so don't assume that the lender will provide you with a mortgage simply because you have completed the first step. Failure to realize this could cost you your new home!
The benefits of mortgage pre-approval
An income verified mortgage pre-approval provides potential home buyers with the knowledge and security they need to start house hunting with confidence. The following are two big benefits of mortgage pre-approval:
- A firm budget
Once a home buyer has been pre-approved for a mortgage they'll know exactly how much money they can spend on a home, as well as what their bi-weekly or monthly mortgage payment will be.
- Increased negotiating power
Mortgage pre-approval is a good step to take before shopping for a home because it shows the sellers that you're ready to commit to a purchase. In fact, in some housing markets, it's practically required that you're pre-approved in order for your offer to be reviewed.
For more information on how to get pre-approved for your mortgage, contact FamilyLending.ca toll free at 1-866-941-6678 or start the online mortgage pre-approval process now.