One of the most common questions I am asked is, "what is the difference between pre-qualification and pre-approval?"
So let's get right into it then, read on to find out definitions and explanations of the two:
Pre-Qualification is when you provide your mortgage broker with your basic financial information such as income, assets and debts. From there you will be given a rough estimate of the amount of loan you may qualify for.
Getting Pre-Qualified is a great way to start your home-buying process, it will give you a rough idea of what you can afford and it is a very simple process. However, if you are seriously considering a home purchase a Pre-Approval is definitely the way to go.
Pre-Approval takes concept this several steps further, it is a detailed analysis of your current financial situation and credit profile. Using this information you will be provided with written pre-approval from a lender, which along with other advantages, provides you with up to a 120 rate hold!
Among many others, here are some great reasons to get pre approved;
- It saves you time from looking at homes outside your price range.
- It makes your offer more appealing to a seller, if they know you are a qualified buyer. This means they will look at your offer more seriously which can even result in a lower purchase price.
- We can get you an interest rate locked in for up to 120 days. This protects you from any rate increases that can happen after you have written and offer but before you close on the purchase. This could save you thousands of dollars in interest.
- It provides you with security in knowing you meet the initial requirement
What do you need to get Pre-Approved??
- Documentation - Your Drivers License or Passport as well as S.I.N.
- Income Verification - A job letter, 2 to 3 years of T4's, may also include Notice of Assessment as well as a recent pay stub, proof of any additional income (bonuses, inheritance etc.)
- Details about any bank accounts, credit cards or other debts
- Proof of Assets
- For a more complete list contact me and I can send you a full list of detailed information.