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Mortgage Pre-Approval vs Pre-Qualified

The best way to avoid stress in buying a home is to be Pre-Approved before you start the house shopping process. Don’t just settle for being Pre-Qualified for this could still leave you open for last minute surprises.

Every month we have 2 or 3 files where the clients are referred to us by a Realtor or Lawyer because in the 11th hour of the purchase the financing for the clients does not come together after being Pre-Qualified. Below is a file that was referred to us last month and is a great example of why a Pre-Approval is better than being Pre- Qualified.

The file was for a client who was getting transfer with his job and wanted to keep his current house as a rental and buy and new house in the city he was being transferred to. The client called his Bank which quickly Pre-Qualified him over the phone and told him there was no problem with him buying another house. A short time later the client was leaving to fly to the new city he was moving to in order to look at houses. When he arrived in the new city the Realtor asked him to get confirmation from his bank that he was Pre-Approved not just Per-Qualified. At this point the Bank took the time to look a bit closer at the numbers and determined that they could not approve him for a mortgage because the debt servicing ratio was too high with keeping the other house as a rental property. The client was referred to us and we were able to get him a Pre-Approval with one of our lenders that uses an 80% rental offset as opposed to a 50% offset. The client was able to put an offer on the perfect house and remove conditions two days later.

If you just want to just get a feel for how much you could qualify for and/or just work out some numbers  being Pre-Qualified may be sufficient, we have a phone app that will let you be Pre-Qualified in under 60 seconds and provides you with rate updates and other calculators. This is a free phone app that can be downloaded by clicking on this link: Mortgage Tool Box or go to our web site www.TheBestRate.ca

If you are getting ready to do some serious house shopping, please save yourself from the stress of having to scramble under a time constraint for your financing. Start your home shopping process with contacting the Best Rate Mortgage Team to get a firm Pre-Approval which will also rate protector you if rates go up. We will confirm your income, credit and down payment so that you know exactly how much you qualify for and will have a firm Pre-Approval to avoid any last-minute surprises.

Please call, text or email us anytime with any mortgage questions you may have.

 

 

Compare what a Mortgage Broker can offer to what your Bank offers

It is wise when in the market for a mortgage to compare what is being offered by your Bank with what is available through a Mortgage Broker. The Government of Canada, on their web site https://www.canada.ca/en/financial-consumer-agency/services/mortgages/reduce-prepayment-penalties.html  states that it is best to check with a Mortgage Broker with regards to what they can offer.

The four areas you should compare are:

1) Rate:  Once you have the rate your Bank will offer you, contact us to see if we can offer a better rate from one of our over 40 lenders.

  1. Payout Penalties: No one plans to break their mortgage before the term is up but life happens so confirm with your Bank how they calculate the IRD penalty, then call us. The difference could cost you thousands of dollars.

3) Service: Compare the service you receive from your Bank vs a Mortgage Broker. The bank employee works for the Bank and its shareholders, a Mortgage Broker works for you.

4) Expertise:  Buying a home and getting a Mortgage is the biggest investment you will make.  You want to have someone with many years of experience working for you. At the Best Rate Mortgage Team we have over 20 years of experience.

You shop around and compare when you are buying anything online which saves you money and ensures you are making the right buying decision, so it makes sense to do the same when you are in the market for a mortgage.

Contact us anytime with any mortgage questions you may have

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