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Buying a house is stressful enough without the pressure of choosing the right mortgage rate or product. Now, you can buy your home with the No Commitment Mortgage, and worry about those ‘other’ mortgage details later.
No more having to choose right away between a fixed, or variable, or open or closed mortgage. Our new, open, low-variable-rate mortgage product means that you can make a change at any point during your term, penalty free.
Or, continue along your way with your great rate and mortgage, knowing you have the best product available to reach your mortgage goals. At renewal time, your expert True North Mortgage broker will help you choose the best rate and mortgage fit for your financial goals.
Do I Need To Get Prequalified
You might ask, is a prequalification really necessary when buying a home? The short answer is no.
Theres no rule that says you must get prequalified before shopping for a home. However, a prequalification has its benefits.
Getting prequaligied gives you clues about potential eligibility for a mortgage loan, as well as an idea of your home buying budget. This is needtoknow information, especially if youre questioning whether your income is enough to afford a home purchase.
For example, after a review of your prequalification form, a lender might say you prequalify for a mortgage up to $150,000.
If you believe youre able to find a suitable property within this price range, you might proceed with the mortgage. But if not, you could postpone the mortgage and wait until your financial situation improves.
But although a prequalification is a helpful first step and provides information about budgets, it doesnt carry as much weight as a preapproval.
How Do I Get A Mortgage Pre
First, find out how much you can spend on a mortgage with our mortgage affordability calculator. Then book an appointment with us for more help. Meet with usOpens a new window in your browser..
Scott on: CIBC Mortgage Advisors
Dont forget, once you find your dream home, you need to complete a full application to be approved for a mortgage2.
Ensure you have all the documents necessary for the mortgage application process with our required mortgage documents checklist .Opens a new window in your browser.
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When To Get A Pre
Mortgage pre-approval letters are typically valid for 60 to 90 days. Lenders put an expiration date on these letters because your finances and credit profile could change. When a pre-approval expires, youll have to fill out a new mortgage application and submit updated paperwork to get another one.
If youre just starting to think about buying a home and suspect that you might have some difficulty getting a mortgage, going through the pre-approval process can help you identify credit issuesand potentially give you time to address them.
Seeking pre-approval six months to one year in advance of a serious home search puts you in a stronger position to improve your overall credit profile. Youll also have more time to save money for a down payment and closing costs.
When you are ready to make offers, a seller often wants to see a mortgage pre-approval and, in some cases, proof of funds to show that youre a serious buyer. In many hot housing markets, sellers have an advantage because of intense buyer demand and a limited number of homes for sale they may be less likely to consider offers without pre-approval letters.
Where Do I Get A Mortgage Pre
You can get preapproved by different kinds of mortgage lenders and mortgage brokers. A mortgage broker can help you quickly compare and choose from many of the following types of mortgage lenders:
You may be asked to provide documents for your pre-approval, including things like:
Proof of employment
Proof of your down payment
Proof that you can pay for closing costs
Information about your other mortgage and property taxes if you have other property
Recent tax statements, Notice of Assessment, T4s or others depending on your income types
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Different Lenders May Request Different Levels Of Information And Documentation
Some lenders base preapproval letters solely on the information you provide. Other lenders dig into the details with you now to make certain you have all the documentation you need and prevent delays and surprises later. Ask questions. All lenders will require documentation at some point if you decide to apply for a loan. Its better to know now that you need an additional document than when youre about to close.
When To Get A Mortgage Pre
Because its fairly quick and easy to get a mortgage pre-qualification, its often the first step in the home buying process.
You should seek to get pre-qualified as soon as you decide that youre ready to buy a house.
Pre-qualification will give you a big picture idea of how much mortgage you might be approved for, which will help with subsequent decisions on what your housing budget should be and how much home you can afford.
The main benefit of pre-qualification is for you to know how big of a mortgage you qualify for, not to convince home sellers that you have financing lined up.
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What To Provide To Your Lender Or Mortgage Broker
Before preapproving you, a lender or mortgage broker will look at:
- your assets
- your income
Youll need to provide the following:
- proof you can pay for the down payment and closing costs
- information about your other assets, such as a car, cottage or boat
- information about your debts or financial obligations
For proof of employment, you may have to provide:
- a proof of your current salary or hourly pay rate (for example, a recent pay stub
- your position and length of time with the employer
- notices of assessment from the Canada Revenue Agency for the past 2 years, if youre self-employed
Your lender or mortgage broker may ask you to provide recent financial statements from bank accounts or investments. This will help them determine if you have the down payment.
Your debts or financial obligations may include your monthly payments for:
The Maximum Amount You Can Borrow
You can figure out roughly how much of a mortgage you can afford by using the same calculation the banks use to qualify you. The maximum amount you can borrow is based on two formulas: the Gross Debt Service Ratio and the Total Debt Service Ratio. For the GDS, no more than 30 to 32% of your household’s gross annual income should go to housing expenses, including the mortgage payment, property tax, condo maintenance fees and heating. For the TDS, your debt repayments should not exceed 37 to 40% of your household’s gross annual income. Debt repayments include mortgages, credit cards, car loans and personal loans.
If youd like to understand what you can afford, try out Scotiabank’s mortgage calculator available through eHOME. It only takes a few seconds and you don’t need to fill out an application to access it.
If you don’t meet the qualifications to borrow as much as you need for a property, some options to consider are looking to reduce your debt, increasing your down payment or searching for lower-priced property. If you’re worried that you won’t qualify because you’re a newcomer to Canada or a temporary resident, then Scotiabank offers special mortgage products suited to your needs.
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What Is A Mortgage Pre
Getting a mortgage pre-qualification is the first step in the home-buying process. This comes before a mortgage pre-approval and is not to be confused with it. Mortgage pre-qualification is a relatively simple process where you supply your lender with information about your financial situation including income, assets, and debt. This is an easy and quick process that can be done over the phone or internet and at absolutely no cost to you.
Pre-qualification doesnât take into account your credit rating or give you an in-depth analysis of your affordability. However, pre-qualification does give you the opportunity to talk to your lender about any specific needs or goals that you may have. You can also get a better understanding of what mortgage rates and options might be suited to you. Pre-qualification can give you an estimate of the mortgage amount for which you can expect to get approved.
Which Is Right For Me
First-time homebuyers are more likely to find that getting prequalified is helpful, especially when they are establishing their homebuying budget and want an idea of how much they might be able to borrow.
Preapproval can be extremely valuable when it comes time to make an offer on a house, especially in a competitive market where you might want to stand out among other potential buyers. Again, a seller will be more likely to consider you a serious buyer because you have had your finances and creditworthiness verified.
Ready to prequalify, get preapproved or apply? Get started with the Digital Mortgage Experience.
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Stay In Touch With Your Broker
Stay reachable, in case your mortgage broker has any questions about your documentation. This means avoiding vacations or business trips where you wonât have access to email or phone. If you arenât available, they may make assumptions about your intent, and reject your mortgage pre-approval. If you absolutely must leave town, make sure to inform your mortgage broker in advance.
The Importance Of Mortgage Pre
What you think you can afford and how much your lender is willing to give you can sometimes be very different. You want to make sure you have a full understanding of how much you are pre-approved for early in your home buying journey. Those with low credit scores, self-employment under three years or other kinds of debt may find it more challenging to get pre-approved for the amount they want.
Some realtors wont take you house hunting until you go through the pre-approval process, because you need to first know what you can borrow in order to look at houses in your price range. Getting pre-approved will help you narrow down your search and find a home that will work in your financial plan.
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Gather The Appropriate Documents
Lenders will want to verify your identity, credit history, employment history, income and financial assets to issue a preapproval. Theyll likely ask you to fill out a uniform residential loan application .
The 1003 application asks for your personal information, financial information and loan information, including
- Bank accounts, retirement and other accounts
- Any other assets you have
- Property you own
- Employer contact information
- Debts you owe or other liabilities
Your lender will also likely do a hard credit check, and may require additional documents based on your individual situation, such as pay stubs, tax returns or bank statements.
What Can We Say We’re Pretty Proud About Helping You Get The Best Mortgage Product Ever
We’re obsessed with providing you with better rates, better mortgage choices and unbeatable, 5-star service â to the tune of over $13B in funded mortgages so far. Our happy clients leave us happy words , which help keep us on track and love our jobs.
We make it easy to get a better mortgage, anywhere you are in Canada â online, over the phone, through our chat bubble, or at one of our 11 convenient store locations across Canada.
And, we’re standing by. Give us a shout, today.
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Questions To Ask Your Lender Or Broker When Getting Preapproved
When getting preapproved, ask your broker or lender the following:
- how long they guarantee the preapproved rate
- if you will automatically get the lowest rate if interest rates go down while youre preapproved
- if the pre-approval can be extended
Ask your lender or broker about anything you dont understand.
Can I Get Mortgage Pre
Its unlikely. Initial qualification without a full credit check may be possible with some lenders at that point, they may be interested simply in whether you have both the income to pay back a mortgage and no credit red flags. But to get full-scale pre-approval will likely require a credit check.
Its important to know how long pre-qualification and pre-approval will be in effect. Different lenders assign different times for which their letters of pre-qualification or pre-approval are good, from 30 to as many as 120 days.
Remember that multiple checks for credit history can negatively affect your credit rating, so you dont want to have them repeated often. For the same reason, you shouldnt apply for it until youre ready to start seriously home shopping. Many lenders and real estate agents can help you get a range of what you can afford in a general sense, so that you can avoid going through the pre-qualification or pre-approval process only to learn that theres nothing in your market that you can realistically afford or want.
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Should I Tell My Real Estate Agent How Much I Am Pre
To help tailor your home search,your real estate agentwill ask for your price range and may even ask to see your pre-approval letter. You can let your real estate agent know the maximum amount that you have been approved for, but it is more important to let your agent know the maximum home price that you’re willing to look at. Just because you have been pre-approved for a large number doesn’t mean that you need to purchase a home for that amount. While your agent might want to know your price range, you also do not need to let them know your income or how much money you have.
How Is My Credit Score Determined
Your credit score demonstrates to lenders how risky of a borrower you are. Your score will gradually rise over time if you pay your bills and debts on time. However, it will drop significantly if you miss a payment.
Other factors that harm your credit score include:
- Applying for too many loans and receiving multiple âhard credit checksâ
- Not having a credit history
In Canada, there are multiplefree services to check your credit score.
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First Time Home Buyers Guide: What About Pre
Securing pre-qualification, pre-approval, and mortgage commitment letters can simplify the mortgage application process. These steps can also help home buyers avoid disaster. They don’t need all three, however.
Mortgage Pre-Qualification and Buying a House
Future home buyers can get pre-qualified for a home mortgage long before they ever start house shopping. Used mostly by buyers to gather information and ask questions, this process is quite informal. Applicants have a consultation with a mortgage lender. He or she will ask a range of questions about debt, finances, the type of home the applicant would like to have, and the requirements for various loans.
Using this information, the mortgage lender will then provide the applicant with a range of information. First, the lender will discuss any details in the applicant’s financial profile that may cause issues with the approval process. He’ll also discuss mortgage types, their requirements, and what borrowers need to be approved. This gives people looking to buy a home time to fix any credit problems, ensure they have the down payment, and that they make enough money. It also gives applicants an idea of what size of a mortgage they could get, and therefore, what kind of houses to look at.
Mortgage Pre-Approval and Home Buying
Mortgage Commitment Letter
Warnings about Pre-Approvals
Rbc Royal Bank Mortgage Pre
RBC offers both mortgage pre-qualification and pre-approval. The former is quick and convenient: done through the phone or online, you are required to provide financial information such as income and debt. The lender will then give an estimate of how much they are willing to lend with no obligation.
With a mortgage pre-approval, the lender will actually verify your credit and information although the actual rate or mortgage may differ if you do decide to accept, the lender is obligated to lend to you if you do get pre-approved and meet the conditions. You can apply for anRBC mortgage pre-approvalby filling out their online application form. An RBC mortgage specialist will then take over the rest of the process and let you know what documentation you will need to provide. Typically, if pre-approved you will be able to lock-in a mortgage rate for 120 days.
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Apply For A Mortgage Pre
Most Canadians think the first step in the home-buying process is to contact a realtor and start looking at homes. This isnât correct. The first thing you should do is apply for a mortgage pre-approval. After all, if you find a home you like, youâll want to move quickly. Being pre-approved for a mortgage removes an extra step in the process.
Being pre-approved also helps you know how much you can afford to spend. You can get a good estimate of how much you can afford with our mortgage affordability calculator. However, the hard limit will always be how much the bank will approve you for â a mortgage pre-approval gives you that.
How long does it take to get a mortgage pre-approval? It can be done within an hour if you have your documentation together. Get in touch with a mortgage broker near you to get started.