If you are all set to apply for a mortgage loan for buying a new house, steady yourself! It isn’t always that easy. You first need to get a mortgage pre-approval for such a loan and that could prove to be a bit tricky.
So, what exactly is a mortgage pre-approval and how does one go about obtaining it? Let’s study this matter a little more closely. Pre-approval is a thorough analysis of your finances to understand whether you would be able to pay back your loans. Pre-approved mortgages Mississauga can be easily availed. In fact, due to its large housing market and steady economic growth, pre-approved mortgages in Mississauga are becoming increasingly common.
Getting a mortgage pre-approval involves providing the lender, who is going to give the approval, all the details regarding your financial status. This includes your credit history, credit score, debt-to-income ratio, assets, liabilities, history of your employment and the incomes you earned.
Based on these inputs, the lenders will draw up a report which will let you know whether you are worthy of receiving the loan or not. They will check how your finances would withstand the challenges that may occur, therefore, it’s also a bit like a stress test.
At the end of this process you will have a clear understanding of your capabilities when it comes to taking a loan. You will be made aware of the range and extent of loans you can take and successfully service. It will also give you an idea of the interest rates which are affordable for you. With this information availed, you can look for houses that are affordable and fall within your means.
Pre-approval for mortgage loans have an expiry date. Usually, they remain valid for 60-120 days as the finances of any individual may change in that period. After the expiration, you will need a new pre-approval to continue your search.
Mortgage pre-approval should not be confused with pre-qualification. Pre-qualification involves a lender skimming through the main details of your financial condition. As a result, pre-qualification merely gives a rough estimate of the loan and interest that you can afford. It is not a substitute for a pre-approval.
Contact Mississauga mortgage brokers, GT Mortgages to apply for pre-approved mortgages.