What is a Mortgage Pre-Approval?
While a mortgage pre-approval may sound intimidating, it can actually give you an advantage when deciding whether or not the terms of the agreement will be favorable. Even though getting a pre-approval takes a little more work, the information that it gives you will often make the process worth it.
Before pulling the trigger on your new mortgage, you’ll want to be as sure as possible of the terms of the agreement. The first thing that you’ll learn from a pre-approval is just how much money you’re lender will provide in the mortgage agreement, so you’ll know how much of the home they’re financing.
Knowing this will allow you to be sure that your home is within your price range and that you’ll be able to support your mortgage with your current level of income. This can help reduce the financial stress associated with your mortgage.
Another thing that makes it easier to determine whether you’ll be able to pay off your mortgage is the estimate of how much you’ll be paying in each period and the duration of each one. A pre-approval will let you know whether you’ll be paying monthly or bi-weekly, and how much you’ll pay at a time.
One of the main reasons why people like to get a pre-approval for their mortgage is because it allows them to lock in a specific interest rate for a certain time. This period will usually be between 60 and 120 days.
Keep in mind that the closing costs won’t be included in your pre-approval, so it won’t tell you everything about how much money you’re going to spend. Of course, existing upkeep and maintenance for the home that you bought also won’t be included in your pre-approval.
While a pre-approval can provide you with a lot of helpful info, don’t fall into the trap of thinking that it contains all of your possible costs. It always helps to keep track of your finances separately so that you can keep track of every expense, not just the ones listed in your pre-approval.
Requirements for a Pre-Approval
Like with most other parts of getting a mortgage, you’ll have to provide plenty of documentation so that you can get your pre-approval. The first thing that you’ll need to provide is photo identification, which is to be expected. That is followed by proof of employment as well as proof that you can pay for the closing costs and the down payment.
Of course, you’ll also have to let the lender know about any outstanding debts that you have, including credit card balances, loans, and car leases. You’ll also need to tell them about your assets. These assets can include cars, boats, property, and more.
All of this info is necessary so that your lender can determine how much of a risk it will be to provide you with a mortgage. This is the process that they would go through to decide on the terms of a mortgage even without a pre-approval, but doing so allows you to get the info in advance.
How Can I Help?
If you’re looking for a mortgage pre-approval in Winnipeg, then I can help you out. I have plenty of experience working with clients that want to buy their dream home but have no experience. My expertise can help simplify the process of getting a pre-approval on your mortgage.
Whether you want me to handle the entire process, or if you’re just looking for a quick consultation, feel free to contact me, and I’ll see what I can do for you. A pre-approval is the first major step towards getting your mortgage, and you’ll want to be sure that you do everything right.