What is a Mortgage Pre-Approval?
A mortgage pre-approval is a document from a mortgage lender stating, based on the information provided in your mortgage application, they will be willing to provide you with a mortgage loan of a certain amount at a certain interest rate.
Pre-approvals in Calgary do not guarantee that you will be able to get the loan but give you a guideline so that you can begin house hunting. Obtaining a mortgage pre-approval is one of the most important steps in the home buying process. It allows you to determine your purchasing power, your required down payment and your monthly costs.
What Does a Mortgage Pre-Approval Do for Me?
A mortgage pre-approval in Calgary serves a few purposes:
- It gives you an idea of what size of mortgage you qualify for and how much house you can afford.
- It gives you a guaranteed mortgage interest rate (for 90 to 120 days, depending on the lender). If rates drop between the time you get your pre-approval and when you purchase your home, you automatically get the lower rate.
- It speeds up the financing approval process once you find a home to purchase because you’ve already completed most of the work.
- It shows your Realtor and the property sellers you’re serious about purchasing a home and you aren’t just browsing or wasting their time.
What’s the Next Step After Getting a Pre-Approval?
After you have your pre-approval, your next step is to jump right into Calgary house hunting! You’re armed with a price range for homes and an interest rate, so you’re good to go.
Once you have found a home to purchase, let your Calgary mortgage broker know and they’ll get moving on the remainder of the financing process with you (collecting documentation to support your mortgage application).