Are you pre-house? Here’s the difference in starting your process.
If you need a mortgage loan to buy a house — way before you place an offer, you’ll need a lender on board who will loan you the money.
So, what do you need to start your process, and when? That depends on whether you’re in the early stages of planning to buy a home, or about to go house-hunting.
Pre-qualify to get set:
“I think I want to buy a house, so how much can I afford?”
A pre-qualify is a great start BEFORE you go house-hunting. It gives you:
- The opportunity to connect with your expert Mortigo mortgage specialist to learn how mortgages work and what financial details you’ll need to have in place
- A ballpark idea of what house price and in what neighbourhood you could buy
- Which lender and mortgage products may be best for your situation
- A sense of the rate-type and term that may work for your budget (e.g. how can I lower my mortgage payments?)
- The ability to review or adjust your current finances, including getting your down payment together, or improving your credit score
Pre-approve to get serious:
“I want to start house-hunting now, how can I hold my great rate?
A pre-approval is an essential step for WHEN you start house-hunting. You’ll get:
- A more accurate idea of the size of mortgage you can afford (you’ll provide more financial information than for a pre-qualify)
- The lender and mortgage type that is best for your situation
- The ability to hold your best rate for up to 120 days (a credit check is done by the lender to ensure your standing)
- The financial pieces in place to be taken seriously by real estate agents and sellers
- A quicker and easier close on your mortgage application, as you’ve already been pre-checked by a lender
Some of our clients skip right to a pre-approval, so that they’re ready and set to place an offer on a house.
Not all of our clients get pre-qualified first. In fact, it’s about 50/50 as to whether a pre-qualify is the best fit, or if we move right ahead to a pre-approval.
If you contact us at the point when you’re ready to go looking, or maybe you even have a house in mind, your True North Mortgage broker will do a pre-approval, which includes a credit check and rate hold, to quickly get everything in place — and to help assure that you’ll receive the financing you need.
You should know: Neither a pre-qualify nor a pre-approval is an actual guarantee from a lender. The ‘pre’ part gets you as close as possible to the amount the lender will actually approve, so that you can house-shop with more confidence.
Your full mortgage approval happens when you have, in hand, your accepted (usually conditional) offer on a house. Your Mortigo mortgage specialist will help finalize all the details, and outline every last closing cost, to complete your fully-approved mortgage application. Your final approval will be based on the financial info and docs provided, as well as the house you’re purchasing.
What happens if I place an offer when I’ve only been pre-qualified?
If you skip the pre-approval step, it may mean that you’re taking more of a risk as to whether you’ll actually be approved by a lender. In fact, many real estate brokers and sellers strongly prefer that you get fully pre-approved, to make the sale go smoother and with less chance that you’ll be denied your mortgage application (and have to start over again with another house).
How long does either mortgage process take?
Because a pre-qualify requires less financial info and doesn’t involve a credit check, it may take one of our expert True North Mortgage brokers only a few minutes to help you determine your rough mortgage-affordability.
Take a spin with our Mortgage Affordability calculator to get some ballpark numbers, then give us a shout or apply online for your details.
Need a real-estate agent? We can provide that too, from our trusted, long-standing relationships in the industry.
If you want to be pre-approved, our expert brokers have instant access to lender mortgage products and your best rates, even from your own bank.
- Our process is shockingly fast and easy, with our short form taking only 9 minutes to complete (apply now to start!)
- Your pre-approval can take minutes to a couple of days
- There are some circumstances, such as credit issues or self-employed home buyers, that may require longer to finalize a pre-approval with a lender
What shouldn’t I do if I’m looking to get a mortgage pre-approval?
Around the time you want to apply for a pre-approval, and until your home purchase is finalized, there are a few things to avoid to help ensure lenders are on board:
- Hold off on any major purchases or on taking out a big loan, such as for a car, for a couple of months (at least) before applying for mortgage financing
- Don’t spend any of your down payment (thinking you’ll replace a portion in time to place an offer on a house)
- Don’t move or transfer large sums between accounts (and have a solid paper trail if you do)
- Don’t apply for new credit, which will affect your debt ratios
- Avoid any job changes, which will impact how the bank evaluates your income (steady and predictable is the way to go)
- Pay bills on time, and don’t miss any payments
