Getting Preapproved for a Mortgage in Edmonton
The first step in becoming a home owner, is getting pre-approved for a mortgage. Until you know if you qualify and how much you qualify for, your home search can’t really get off the ground. Many clients make the mistake of starting to shop first, before talking to their bank or broker. When you get pre-approved for a home loan in Edmonton, you can be confident knowing you have the financing in place. This gives you a price range to work with and a 120 day rate guarantee. You don’t need to be concerned with rising interest rates during your home search.
Benefits of Getting Preapproved
Without getting preapproved for a home loan, you really don’t know where you stand. Chances are, your realtor will not even work with till you have gone through the process. Now with the stress test requirements, it’s even more complicated. A full preapproval which confirms all your income and down payment (like RateDeals.ca does), you will be ready to find that new home. There are cases where clients get pre approved only to find out at the time of purchase, that they actually do not qualify due to employment or down payment issues that were not discovered earlier in the process.
The other important aspect of a pre-approval is the rate hold. This will become more important as rates start to rise. As rates go up, your pre approval amount can go down, this is why locking in a rate is so important. We can hold rates up to 120 days for a typical resale home purchase, and for up to 12 months on construction mortgages.
Why a Full Preapproval is Imperative
When you do find that perfect home, you will likely only have 7 days to put the financing in order. This is not a lot of time after you take the weekend out. By getting all the documentation together first, that may save a day or two and allow us to get your deal approved in time to remove the financing clause. If there are issues with these docs, it is often not a deal killer, but we may have to submit to a different lender delaying the process. A worst case scenario, and we see it a lot from clients who come to us after dealing with their banks, that they were never going to qualify and they have wasted a lot of their time and effort looking after a flimsy preapproval.
Our preapprovals are more thorough, we do all we can to make sure when we send you out that you are going to get approved. There are never any guarantees but we do our due diligence to make sure we do all we can to get you prepared.
What a Preapproval Does Not Mean
Getting preapproved is a must before starting your search for a home. However you must remember what it actually means and what it doesn’t mean. What it doesn’t mean is that you are approved and your financing is all but guaranteed. At this early stage, the lender does not know what you are buying (maybe a home that is not financeable). The lender may have preapproved you for a certain amount, however the property has higher costs associated with it than they anticipated (ie condo fees, property taxes etc).
Another issue is income, until you find a property and make an offer, the lender will not confirm your employment. The lender will call your employer to confirm the information on your job letter and in some cases even ask if your future prospects for employment look good. All of these issues will not be known until after you find a property.
Talk to us today about getting preapproved for a home loan in Edmonton, we offer the best rates and the most mortgage options.