Receiving an income verified mortgage pre-approval is a good strategy for securing your new home. Two positive consequences can come from this decision. First off, a pre-approved mortgage allows you to narrow down your housing search based on a concrete budget. This leads to the second major benefit, which is the increased likelihood of your offer being accepted by the seller based on the financing that has already been put into place.
What is a mortgage pre-approval?
To gain an income verified mortgage pre-approval, you’ll need to send your mortgage broker information relating to your employment history, income, assets and liabilities, and an estimated down payment amount. This will be used to pre-qualify you for a mortgage and provide an estimate of the financial support you are qualified to receive. Getting a pre-qualified mortgage will also provide you with an approximate rate of interest on your mortgage.
Note: it’s important that you do not confuse mortgage pre-qualification with an income verified mortgage pre-approval. Being pre-qualified for a mortgage does not mean you are guaranteed a specific mortgage amount or rate.
Pre-approval occurs after a thorough assessment by the lender, which can be done over the phone or online with the help of your mortgage broker. As such, your lender will require certain documentation to appraise your financial and credit history. You will also need to complete a formal mortgage application. Once you have become pre-approved you will be notified of the exact amount of money you will be able to borrow. This means you will have a written statement of a conditional agreement in which the mortgage amount, term, interest rate, and expiration date will be specified.
Don’t forget, FamilyLending.ca provides free, no obligation online mortgage pre-approvals. FamilyLending.ca also offers a number of free online mortgage pre-approval calculators if you’re interested in crunching a few numbers prior to beginning your online pre-approval.
Mortgage Pre-Approval Advantages
- Specific budget
An income verified mortgage pre-approval enables you to look for houses that are within your financial parameters. It will also allow you to create a future budget based on what your payment amount and payment schedule should entail.
- Advantage in negotiations
The fact that you’ve come prepared with financing shows the seller that you are a reliable buyer and that your offer is worth considering.