Is 2021 the year that you plan to purchase a home?  If you are looking to get in to the housing market, the first step is to get pre-approved & we are here to help you get yourself ready for the pre-approval meeting.

Your first time to getting pre approved is to choose wether you would like to work with a mortgage broker or with a bank mortgage specialist.

In the past, prospective home buyers chose to work their banks for their mortgage needs. Today, you have more options at your disposal with the growing presence of mortgage brokers. Here’s what you need to know about mortgage brokers and banks.

Mortgage brokers vs. banks: What’s the difference?

The difference between banks and mortgage brokers is that banks can only offer their own products, while mortgage brokers can present multiple mortgage options. Independent mortgage brokers have access to multiple lenders and mortgage rates. They essentially negotiate the lowest rate for you, and because they acquire high quantities of mortgage products, mortgage brokers can pass volume discounts directly on to you. Banks, on the other hand, can only offer their own mortgage products.

It is always a good idea to shop around for a mortgage broker & a mortgage rate, or get a referral from your Realtor, or family or friend who have had great success with their own mortgage brokers.M

Once you have chosen your mortgage broker, the next step is to fill out their Mortgage Application.   Usually when you fill out the application, they will ask you about your debt, down payment, etc and they will seek permission to pull your credit report.   Your credit does affect your affordability as well as what type of mortgage & lender they will be able to find for you.

Once your application is filled out, the next step is to submit documents to your Mortgage Broker.   Its best to have all your documents ready so that you can properly be ready to go out and start house hunting.    Your mortgage broker will require:

  1. Past 2 Years T4 Slips
  2. Letter of Employment
  3. Pay Stubs
  4. Proof of Downpayment

A pre-approval should be considered as a rate hold rather than the guarantee of mortgage approval.  This rate hold usually lasts for 90 – 120 days. Therefore, giving you time to explore the market before making an offer on a home.  A rate hold usually means that a lender is willing to review your application further based on the financial details that you have provided to your Broker. The rate hold protects you in the event that rates go up but will still allow you to access lower rates if they are available at the time you make an offer. It is important to note that if your financial position changes, you may not qualify for this rate when you submit your application. Though a pre-approval will not guarantee a mortgage, it will give you a maximum purchase price that you can be approved for. Once you have a pre-approval in place, you can start your house hunt with more confidence!

Stay tuned for more home buying tips!

Your Local Barrie & Area Real Estate Team for RE/MAX Hallmark Chay Realty

Heather Beauchesne & Mariale Schrobback