Congratulations on your pursuit of home ownership. This is often the biggest purchase of our lives and the more you are prepared, the easier the entire process will be for you.
The pre approval process is the most important first step in the home buying process. It is crucial this is done properly with an experienced professional – and that it is done thoroughly reviewing your income documentation and credit up front.
This is the biggest investment of your life – you do not want to get a “maybe”
A pre approval will allow you to:
- know the maximum amount of a mortgage you could qualify for
- estimate your mortgage payments
- lock in an interest rate for up to 120 days, depending on the lender
The mortgage pre approval process may be divided in various steps. It may also be called mortgage pre qualification. Different lenders have different definitions and criteria for each step they offer.
During this process, your mortgage broker looks at your finances to find out the maximum amount they may lend you and at what interest rate. They ask for your personal information, various documents and they likely run a credit check.
This process does not guarantee your approval for a mortgage.
Before being pre approved, a lender or mortgage broker will look at:
- your income
- your level of debt
- your assets (what you own: liquid and non liquid)
You’ll need to provide the following:
- proof of income *crucial
- proof you can pay for the down payment and where it is coming from + closing costs
- information about your other assets, such as a car, cottage or boat
- information about your debts or financial obligations
- Consent to pull a credit report on your behalf *crucial
Proof of income, you may have to provide:
- Proof of your current salary or hourly pay rate (for example, a recent pay stub and letter of employment)
- your position and length of time with the employer (min 3yrs)
- notices of assessment from the Canada Revenue Agency for the past 2 years, if you’re self-employed
- Last 2 yrs T1 generals (personal) – (if self employed)
- Business financials (if incorporated)
Your debts or financial obligations may include your monthly payments for:
- credit card balances
- child or spousal support
- car loans/leases
- lines of credit (secure or unsecured)
- student loans
- any other debts
After you have completed your thorough pre approval (which includes full application, providing income documents up front and reviewing your credit report) you will be ready to start your home buying journey
We will provide you with guidance and support every step of the way now and for the life of your mortgage.
We have your back for life;)