Pre-Approvals

You have probably heard the term “pre-approval”. Real Estate agents will often ask home buyers if they are pre-approved.This term is deceiving.In most cases, a home buyer actually has a “rate hold” instead of a “pre-approval”.The only way to be sure if you have a pre-approval is if your Mortgage Broker has collected, examined, and verified all of the required income and down payment documentation.

In our current market, many properties are receiving multiple offers significantly higher than the listing price.You may hear your real estate agent refer to “cash” offers.This refers to an offer or Agreement of Purchase and Sale (APS) that has been submitted on a property that has no conditions.Even with a pre-approval, a lender will still have to approve the property that you choose so a “Condition of Financing” will be necessary on your offer.Putting in an offer with no conditions is very risky if you are counting on being approved for a mortgage.There are ways to make it possible but you must make sure you have the options in writing from your Mortgage Broker before you take this drastic step.

It is wise to see a Mortgage Brokerat least6 months before the datethat you would like your mortgage to close (the day you get your keys).Usually, if there are any issues that need to be tidied up, 6 months will allow the time needed to collect the correct documentation and make a mortgage application stronger.Once all of your documentation is verified, a Mortgage Broker can advise you on the appropriate purchase price that you would realistically qualify for.

A good Mortgage Broker will make sure you understand the monthly mortgage payment amounts.You will be made aware of other monthly costs, such as Property Taxes, Water taxes, Insurance, and Utilities, to get a more accurate picture of the true cost of owning a home.It’s better to be prepared than surprised when it comes to owning a home!!