{"id":232198,"date":"2021-03-15T20:00:00","date_gmt":"2021-03-16T00:00:00","guid":{"rendered":"https:\/\/milesopedia.com\/news\/pre-approval-hypothecary-canada\/"},"modified":"2024-05-31T13:16:57","modified_gmt":"2024-05-31T17:16:57","slug":"pre-approval-hypothecary-canada","status":"publish","type":"post","link":"https:\/\/milesopedia.com\/en\/personal-finance\/mortgages\/pre-approval-hypothecary-canada\/","title":{"rendered":"Mortgages: What is mortgage pre-approval in Canada?"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text el_class=”checkmarks”]One important step you can take before you start looking for the perfect property<\/a> is to get pre-approved for your mortgage<\/a>. This will save you time and headaches in your search for the perfect home by simplifying the whole process. A pre-approved mortgage will help you understand exactly what you can afford, and therefore what your budget range is when looking for properties. Not only will you understand your budget, but you will also understand the mortgage rate you will get before you submit an offer on a property. This will protect you in the event of a rate increase while you are looking for a property and making your offer.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading el_id=”what_is_a_mortgage_pre-approval_” text=”What is a mortgage pre-approval?” google_fonts=””][vc_column_text el_class=”checkmarks”]A pre-approval, often referred to as a “mortgage”, is a commitment by your lender or mortgage provider to lend you a specified amount of money at a specified interest rate. The advantage of getting pre-approved is that you will know exactly how much you can afford to offer on a property. For example, if you are pre-approved for $500,000, there is no need to look at $550,000 worth of properties because you know exactly what your maximum budget is. You will also receive your rate as part of your pre-approval, and you can use it to calculate your likely monthly payment<\/a> amount as you review each property. Mortgage pre-approval is a free service, and you will have no commitment to the lender even if they provide a pre-approval. It’s also a great way to compare different lenders, as some may be willing to lend you less and at lower rates at different times. Normally, a lender will hold your pre-approved rate for 120 to 160 days, after which you will have to start the process over. It’s a good idea to go through the mortgage pre-approval process just before you start looking at properties; that way you can take advantage of the pre-approval for as long as possible. It is important to keep in mind that if interest rates change significantly after your freeze period expires, and you need to reapply for pre-approval, you will receive the new rates and not the old proposed rates. However, if rates drop during the rate freeze period of your pre-approval, the lender will most likely honor the lower rates they are currently offering. That said, there is no guarantee that a pre-approval will result in this exact rate being applied to your mortgage. Some factors may change between the pre-approval meeting and the final closing on the property. The lender will do a final check of your personal situation once your offer has been accepted, and may change the rates slightly if they feel you are a slightly higher risk since the first offer.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading el_id=”how_do_i_get_pre-approved_for_a_mortgage_” text=”How do I get pre-approved for a mortgage?” google_fonts=””][vc_column_text el_class=”checkmarks”]You can either meet with a mortgage broker or go directly to the lender. During this meeting, you will be asked a multitude of questions and your answers will normally be supported by evidence or documentation. Supporting documents you will likely need include:<\/p>\n