Can I Offer More Than My Pre
Yes, you may choose to make an offer that is more than what you were pre-approved for. If your offer is accepted and you go ahead with the purchase, you’ll need to find a way to finance your mortgage. If your offer is significantly more than your loan pre-approval amount, then you may need to make a larger down payment. If the difference is small, you may be approved for a larger mortgage when it comes time to apply for an actual mortgage.
Monthly Income And Combined Housing Expense Information
A listing of your base monthly income, as well as overtime, bonuses, commissions, net rental income , dividends or interest, and other types of monthly income, such as child support or alimony.
Also, youll need an accounting of your monthly combined housing expenses, including rent or mortgage payments, homeowners and mortgage insurance, property taxes, and homeowners association dues.
Finding The Right Mortgage Lender
Getting a mortgage approved has become more complex with increased regulation and tighter lending criteria since the 2008 credit crisis and 2014s Mortgage Market Review .
Mortgage providers have become more focused on their core customers and, as such, many who visit the high street can struggle unless their situation is completely normal and straightforward.
This has created gaps in the market where creditworthy customers are unable to find the mortgages they need. Thankfully, in the years since the market began to recover, old and new specialist mortgage companies have blossomed, resulting in some criteria relaxation.
What this has created, however, is a tricky landscape to navigate, and youd be forgiven for not knowing where to look many brokers themselves have a hard time!
With so many lenders only offering mortgages to customers who fit a very specific profile, more people are finding the need to go beyond the high street to find specialist mortgage lenders.
The brokers we work with are expert whole-of-market brokers with experience of helping customers find the right mortgage and lenders who are willing to look at borrowers with more unusual circumstances.
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What Documents Do I Need
What documents are needed for mortgage pre-approval? This is another common question among first-time home buyers. The list of documents will vary, depending on which lender you use. But most of them will ask for some or all of the following items:
Your lender will give you a complete list of the documents they need, at the time you submit an application. They might even have this list published on their website somewhere.
Documents Needed For A Mortgage Application
Unlike the prequalification process, there are some standard documents youll need to submit for a mortgage preapproval. Most of these are standard for all borrowers. However, other documents may be required depending on the type of loan you want to get, the type of residence you wish to buy and the kind of work you do.
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A Lenders Incentive To Give You A Loan
You can also think of this from a lenders point of view. Banks are not handing out mortgages to be nice or to give people a helping hand. They are trying to earn interest on your loan. So to them, this is a revenue-earning business. It would not be a wise business decision to lend large amounts of money to someone who already bears significant debt, who doesnt pay bills on time or who does not have a consistent work history.
Is A Mortgage Pre
No! Mortgage pre-approval and pre-qualification are not interchangeable.
The difference is really in the depth of the lenders research. In order to be pre-qualified, you report your income, debt and assets to your lender, and your lenderwithout questioning your numberstells you, “Based on the numbers you gave us, you may qualify for this much of a mortgage.”
But those numbers dont have to be accurate. If you bent the numbersif you werent precise about your income, your tax returns, or your debta pre-qualification will only give you a rough estimate.
A mortgage pre-approval, on the other hand, is a thorough inquiry into your finances. A lender wont simply ask how much income you makeyoull have to prove it. Your lender will also pull your credit history, verify your income and assets, and assess your financial situation before they give you a mortgage pre-approval.
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How Do I Get A Mortgage Pre
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.
Two Smart Homebuying Moves: Mortgage Prequalification And Preapproval
Find out how much house you can borrow before you start looking and how you can make the strongest offer possible on the property you choose.
If youre ready to make your dream of owning a home a reality, youve probably already heard that you should consider getting prequalified or preapproved for a mortgage. Its time to understand exactly what each of those terms means and how they might help you. And when youre working toward a goal this big, you want every advantage.
Ready to prequalify or apply? Get started
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What Information Do I Need To Gather Before I Attempt To Get Pre
To help save you time, it would be wise to do some preliminary homework. You should have some facts and figures ready before you meet with a mortgage broker to discuss mortgage pre-approval options.
You are certainly welcome to call and ask questions at any time. However, ultimately, any Vancouver mortgage broker will need to collect the following, provable information from you , to get you concrete answers from lenders. These are:
What Factors Are Considered For Pre
Lenders verify certain borrower information before providing a pre-approved offer. These include verification of employment, income, assets and credit score. A full credit report and credit score are pulled at the time of application vs. a limited credit report that is often used with pre-qualification offers.
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Should I Get A Mortgage Pre
Should I get a Mortgage Pre Approval?
Going through the pre-approval process is important. However, the actual term pre-approval is often misunderstood. Its not magic, and its certainly not binding.
Lets be clear, a pre-approval isnt for the lender its for you!
And yes, if youre considering buying a property, you should start with a pre-approval. But be aware that simply having a pre-approval isnt all you need to secure mortgage financing.
When you sit down with your mortgage broker, well discuss your financial situation, work through a lender product review, access your credit report, and review all income and downpayment documents. At the end of the pre-approval process, you should be clear just how much you qualify to purchase and how much this will cost. A pre-approval should never be relied on as a sure-fire bet for future mortgage financing. There is a lot more to work through.
While we can work together to preview and catch any significant areas of concern such as unpaid/unfiled taxes, employment probation, or clarity around downpayment origins, please understand that lenders do not offer a formal live review of documents, so its important to protect yourself as best you can.
So the bottom line is, start with a pre-approval, but protect yourself by allowing enough time in the purchase transaction to finalize the mortgage financing. If you have any questions about this or anything else mortgage related, please dont hesitate to contact us anytime!
Quick Start Home Loan Pre
To get your pre-approval application started, tell us a bit about yourself and the loan you’d like it’ll take just 5 minutes then we’ll call you back within 24-48 hours to help keep your application moving.
Remember, you must be over 18 years and an Australian or New Zealand citizen or permanent resident to apply.
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What Is A Mortgage Pre
9 Min Read | Jun 20, 2022
Many lenders claim that if youre not pre-approved for a mortgage, you dont stand a chance in the housing market. But what exactly does mortgage pre-approval mean? And will it really help you stand out from the battalion of buyers bombarding the real estate market?
Lets break down the mortgage pre-approval process and find out!
What Is A Pre
A pre-approved home loan is a written document indicating that a bank or mortgage lender has thoroughly investigated your financial standing, and has determined that you are a suitable candidate for a loan. It is not a commitment from the lender, but merely illustrates that you meet their criteria for a home loan, and the amount they would be willing to lend you. A pre-approval does not address any specific terms of your potential loan, such as interest, mortgage rates, or the life of the loan. That will come later in the home buying process. Once you put in an offer on a property, and it has been accepted by the seller or the seller’s agent, you will still have to formally apply for an actual mortgage, and will have to negotiate the final terms of your home loan.
With the above in mind, here is a table of current mortgage rates in your local area, so you can get a feel for what to expect in terms of monthly payments for different loan amounts.
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Get Information From A Source You Trust
It’s natural to have questions. Besides the basics such as the interest rate and term, it’s a good idea to ask about other things like prepayment charges if you plan to sell your property or pay down your mortgage loan faster. To ensure that you get accurate, actionable information we recommend seeking answers from a trusted source. TD Mortgage Advisors are well versed in every aspect of the mortgage process and can be an easily accessible source of information.
When Should You Get A Mortgage Preapproval
You should get a mortgage preapproval if youre serious about looking for and making an offer on a home within the next two months. Preapproval letters are good for 30 to 60 days, according to the Consumer Financial Protection Bureau .
If it takes you longer than a month or two to find a home, the lender may need to update your preapproval with more recent pay stubs and bank statements. If your house hunt takes more than 90 days, the lender may also need to pull a new credit report, which may impact your credit score.
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Learn More About The Benefits Of Prequalification And Preapproval
As you look for a home, you may be asked to get prequalified or preapproved. Before you start, its important to understand the difference.
When you want to talk to a lender to establish a general range of home prices, you can get prequalified, which is simply a lenders estimate of what you could potentially borrow.
This can be completed easily and conveniently online, in person, or over the phone in just a few minutes with basic information like your income and expected down payment.
When you want to give yourself a competitive edge over other buyers in the market, you can get preapproved. Having a preapproval lets sellers know that you already qualify for the home financing which greatly increases your chance of having your offer selected.
Unlike prequalification, preapproval is a more specific estimate of what you could borrow from your lender and requires documents such as your W2, recent pay stubs, bank statements and tax returns.
The lender will then use these documents to determine exactly how much you can be preapproved to borrow.
Once youre preapproved, youll have 90 days to find a home you love. Then you can lock your rate and complete your application.
Whether you choose to get prequalified or preapproved, you will have a better sense of whats in your price range and can hunt for a house with confidence.
Shop Around For A Great Pre
Just as youâll see several homes before settling on âthe oneâ, you should shop around for the best mortgage rate. Donât just go to your local bank branch and expect to receive a great deal. Do your research and compare mortgage rates, or use a mortgage broker who will negotiate on your behalf.
Even half a percentage point can make a huge difference in your regular payments and the amount of interest youâll pay over time. To see what we mean, plug your numbers into our mortgage payment calculator, then change the interest rate in small steps. Youâll very quickly see the difference!
What happens after your mortgage pre-approval? Generally, youâll have a 90 to 120 day period where your offered rate will be held for you. This is when you should begin house-hunting!
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Can I Get Guaranteed Mortgage Approval In The Uk
Nothing is ever guaranteed in advance as the lender must carry out thorough checks to make sure you meet their eligibility and affordability requirements. However, you could boost your chances of mortgage approval by making an enquiry with us. Well introduce you to a whole-of-market broker who can pair you up with the provider most likely to offer approval.
How Long Does A Mortgage Preapproval Take
Some lenders offer same-day mortgage preapprovals that include electronic verification of your employment, credit and assets. Others may take several days, depending on how complicated your financial situation is. Ask lenders upfront what their timelines are. Expect a longer wait if you have credit bumps or are self-employed.
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Proof Of Current Debts
Be honest when you declare your additional debts. Lenders take pre-existing debt into consideration when deciding if you are an ideal candidate for a home loan. As such, billing statements from credit cards and other loans should be submitted so that the lender will have a birds eye view of your expenses.
Why Cant I Shop For A House With A Pre
A pre-qualification is different from a pre-approval. Pre-qualifications are meant to provide quick, general estimates of what you can afford, based on the likelihood of a lender giving you an approval later . This is just to help you understand what youd be looking at, cost-wise, should you want to proceed with the home-buying process.
Pre-qualifications can be a bit of a reality check. After receiving a preliminary answer from a lender, you may feel more confident in your ability to make a real estate purchase. Then, you can move on to the next step, which would be a pre-approval. Or, you may decide to wait until you can save for a bigger down payment, before spending your time shopping the market, which may be fruitless otherwise.
A pre-approval is, more-or-less, a clear yes from a lender. They are saying that, barring extenuating circumstances , that you will get a loan from them to buy a house.
To others, being pre-approved is an indicator that you are serious about buying a home. Real estate agents, sellers and lenders will give you more clout at open houses or during home viewings.
With a pre-approval, youll be able to make actual offers on a home you want to buy. This is useful if you see one that you like, and dont want to lose time waiting for a pre-approval, in case others are also bidding.
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Proof Of Employment And Income
A regular source of income is a must if youre looking for a pre-approved mortgage. You have to show that you are steadily, consistently employed: typically by remaining an employee of the same company for a certain amount of time, and that you are paid regularly.
For those who are self-employed, things might be a little different, as you’ll have to prove youre financially stable by showing documentations of your business and/or freelance activities despite not being an ordinary employee. Some ways you can show this include:
- Pay slips/Invoices
- Tax returns
When To Get Mortgage Pre
Typically, once approved AIPs, are valid for up to 3 months.
It is always advisable to get the AIP in place before you try to purchase, so you know you have the money behind you and have an idea of what you can afford to borrow.
If youre looking to buy in 6 months time, it might not be worth obtaining an AIP, but it can still be worth talking to an expert so you know what youre looking to do is possible. Otherwise you might spend the next 6 months looking for properties you cant afford.
Borrowers often come to us requesting an instant mortgage pre-approval, which is certainly possible. We offer a red carpet service through the brokers we work with for these situations where speed is paramount. Visit our quick mortgages for more information.
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Home Loans Preapproval Checklist
- A drivers license or U.S. passport
- A Social Security number or card. If not a U.S. citizen, a copy of the front and back of your green card
- Verification of employment
- Copy of their credit reports from the three national credit bureaus
- Recent pay stubs covering the last 30 days
- W-2 forms from the previous two years
- Proof of any additional income
- Last two years of personal federal income tax returns with all pages and schedules. If self-employed, last two years of individual federal income tax returns with all pages and schedules, as well as a business license, a year-to-date profit and loss statement , a balance sheet, and a signed CPA letter stating you are still in business
- Bank account statements proving that you have enough to cover the down payment and closing costs. If someone is helping you with the down payment, a gift letter stating that the fund is a gift and not an IOU
- Last quarterly statements for asset accounts , IRA, stock accounts, mutual funds)
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