Get approval to house hunt

Why get pre-approved before house hunting?

Before you fall in love with a home, you should know if it’s within your financial reach.

The first person you should call before reaching out to a REALTOR® is a mortgage professional.

You also need to recognize is that there is a difference between a pre-approval and a pre-qualification.

A pre-qualification is really just a discussion with your bank or lender. Your credit most likely hasn’t been checked and no documentation has been requested.

It is based on unverified information.

A pre-approval is where a complete application has been taken, credit has been checked and supporting documentation has been collected and reviewed.

A pre-approval will give you the confidence to know that you fit within the guidelines of a mortgage lender and also a mortgage insurer if you require an insured mortgage for your purchase.

Here are the benefits of getting pre-approved.

• You will know your price range before you start house hunting.
• Your REALTOR® will know exactly what type of property you should be looking at so that can save you both time and also narrow down your home search.
• Being pre-approved can give you an edge over other buyers as you may be able to close quicker and that might be important to the seller.
• There aren’t going to be any surprises as you will already know how much you require for a down payment, closing costs and how much your monthly mortgage payments are going to be.
• Since you are already pre-approved this may put you in a better position to negotiate with the seller.
• A pre-approval also gives you the benefit of securing your interest rate for up to four months. This is a great benefit especially as interest rates are predicted to increase in the first quarter of this year.

A mortgage pre-approval from a lender is required if you are a first time homebuyer and you are considering the new BC Home Owner Mortgage and Equity Partnership down payment assistance program.

This first step must be completed before you can apply for the program.

You might be surprised to know that many lenders do not offer pre-approvals and will only do a pre-qualification or rate hold.

It is a time consuming process for a lender and unfortunately many pre-approvals do not result in closed mortgages. This is not an efficient use of time for lenders so they are not offered.

Please ensure you are working a Mortgage Broker who will work to secure you a pre-approval from a lender that offers pre-approvals.

Once you have a pre-approval in hand you can then start your home hunting with confidence.

If you would like to get pre-approved or have questions about the BC Home Owner Mortgage and Equity Partnership please call me at 888-561-2679 or email [email protected].

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.