If you are a new buyer and it takes you more time to choose the right property suitable to your needs, pre-approval can help you prepare for when the right property comes along.
To better understand the process of pre-approval, read along its Frequently Asked Questions. This will help you save time and you will have a better understanding of what is in it.
What is a Mortgage Pre-Approval?
A mortgage pre-approval is a process that confirms a borrower’s likelihood of obtaining mortgage financing. Typically credit, income and down payment are reviewed during the process, but not the purchase property since the borrower has not found one to buy yet.
How Long Does Pre Approval for a Mortgage Take?
How long a pre approval for a mortgage takes depends on who is doing the pre approval.
How Long Does a Pre approved mortgage Last?
Technically as long as there are no changes or setbacks (only positive changes) to the borrowers financial picture, then the pre approval can last for years. However a rate hold, which can be part of a pre approval, typically guarantees a rate for up to 120 days. Typically a rate hold makes sense if mortgage rates are threatening to increase. If rates are decreasing, then a rate hold does not make sense as part of a pre approval.
What Credit Score is Needed for a Mortgage Pre Approval
For an ‘A’ low rate mortgage typically a 650 credit score minimum is required. At this level there would need to be a reason provided why the score isn’t higher. A good mortgage advisor can help to sort this out if your score is on the lower side. Otherwise if your score is above 680 then this is considered to be a good score.
What Documents Needed for a Mortgage Pre-Approval Canada?
The documents needed for a reliable pre approval include a letter of employment and eventually, proof of down payment. Your Broker or Banker can pull a credit score if you have not recently obtained one online.
Can I get Pre Approval Mortgage Online?
Most companies offer pre-approval online and over the phone. Typically a phone call of at least 10 minutes is required – however often it can take a bit longer with additional questions about the mortgage process and rates.
How Much does a Pre Approval for a Mortgage Cost?
Through most Banks and Mortgage Brokers, the pre approval is free. There is no cost or obligation with a pre approved mortgage.
What is a Mortgage Pre Approval Letter?
A pre approval letter may be provided by your Bank or Broker and can be used when making an offer on your home. These letters of pre approval you will receive will show your strength to property sellers, and that help our borrowers win offers more often in a competitive market.