The In’s and Out’s of Mortgage Pre-Approvals

When you’re house hunting anywhere in the greater Victoria area; from James Bay to Oak Bay, from Saanich to Langford, it’s a great idea to know the mortgage amount you qualify for, your monthly payments, and that your interest rate will be held for a specified period of time i.e. 90 to 120 days. In some cases the pre-approval and rate-hold period can be even longer.  This way you can shop within your price range, you don’t have to worry about rates rising, and both realtors and sellers will know you’re a serious buyer. This is particularly important in a tight market where inventory is low and there is competition between several buyers. Be realistic and make sure you can afford that pre-approved amount; review all of your home ownership expenses and your monthly budget including property taxes and regular upkeep.

Keep in mind that not all pre-approvals are the same, and that a pre-approval is not a mortgage approval. Some are just a simple rate guarantee subject to lots of conditions and a later approval. For a full pre-approval you need to submit your application and documentation so the lender can qualify you, and even then it’s a good idea to have a financing condition in your purchase offer because your property will need to be assessed by your lender. Be sure to not make significant changes after getting the pre-approval i.e. changing jobs, adding debt or missing payments, co-signing another loan, or using your down payment money.

Contact us today at 250-483-5558 and get off on the right foot in your home buying journey!