The Mortgage Process
Mortgage Pre-Approval
When you get pre-approved for your mortgage, you actually apply for the mortgage even if you don't know which home you will purchase. After checking your credit, and perhaps verifying your income, the lender will commit, in writing, to funding your mortgage, pending a successful appraisal of the home and a few other conditions. You will be issued what is called a Commitment Letter by the lender.
Getting pre-approved can put you in the driver's seat when it comes time to make an offer. Being pre-approved shows the seller you're a serious buyer, who's ready and able to make a deal.
A mortgage pre-approval booked through a lender will guarantee an interest rate for a period of time, typically 60 to 120 days. If interest rates increase the rate is protected and if interest rates come down most lenders will give the benefit of the drop to the client.
To submit your application for pre-approval you will be asked to supply:
- Income verification (ie. job letter, last T4, pay stub)
- Self employed individuals will require 3 years financial statements and personal tax returns
- Confirmation of down payment
- Authorization for a credit report
- Full application including a personal net worth statement