Chapter 7 – Pre Approvals

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Before beginning the bidding war on a potential property, it helps to have an indication of how much you can afford.  Some home buyers don’t fully understand pre-approvals. Even if you obtain a pre-approval, it does not guarantee you will qualify for the financing.

The main benefit of a pre-approval is that it will give you a good idea of how much you can afford in addition to holding a rate for up to 120 days (this varies by Lender) thus protecting you from any sudden rate increases.

Typically, the following is required for pre-approval:

 

Personal Identification

1. Current address

2. Contact information (phone, fax, email)

3. Social Insurance Number

 

Income / Employment

1. Current employer, job and salary. 3 years history.

2. Other sources of income (investments, pensions, etc)

 

Financial Assets/Liabilities

-Down payment amount and source (is it a gift, or from savings?)

 

Credit Check

-Your broker or bank will have to pull your credit bureau. Your credit score reflects your borrowing tendencies and will have an impact on the rate you qualify for


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Iain

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