Welcome to FAQ Friday where we share answers to some of our most frequently asked questions! This week, we’re answering one of the most common questions we get from Buyer’s – “Do I need a pre-approval before I start looking at houses?” Richard answers that big question in this week’s VLOG.
(Don’t dig watching a video….scroll down for the transcription)
“Hello and happy Friday. For those of you who don’t know me my name is Richard Fournier, team leader at The Fournier Experience Real Estate Team. We have had quite a few people ask us this question lately so I thought I would shoot a video and send it to everyone.
The question is: “Do I need to get a mortgage pre-approval before I start looking at houses?”
The short is yes. The first step in purchasing a home should always be to talk to either a mortgage broker or your bank to really understand what you can afford and what you are comfortable paying on a monthly basis.
So why should you do this.
1) Getting a full approval saves you and your realtor a tonne is time. Once you are confident in your spending range, we can then narrow down listings that fit your criteria, avoiding time-consuming showings on properties that aren’t a fit for you.
2) getting a full approval allows you to make a stronger offer – which means that you can reduce the time waiting for financing approval after you have made an offer. You don’t have to include this as a condition of purchase which is a big benefit to a seller. This is especially favourable in multiple offer situations.
One small note here is that if you have a pre-approval you are not guaranteed to get the money. For a full approval you have to send in all of your documents and they have to be verified by the lender. This includes, but is not limited to, income verification, job letters, credit Checks and confirmation of deposit.
Other factors to take into consideration are: to look at what funds you have set aside for a deposit, a down payment, closing costs, mortgage default insurance, property taxes and regular monthly costs such as water and heating.
And finally because mortgage rules have changed as of January 1 of this year, you may not qualify for what you qualified for last year!!
So we highly recommend that you work with a mortgage professional to make sure there are no surprises when we go and make an offer on your dream home.
If you are in need of a mortgage professional please reach out to us and we will put you in touch with the best of the best.
We are always here to help and as always if you have any questions about selling or buying please reach out to us at anytime.
Have an awesome weekend.“
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