Whether it is your first house or your tenth, typically the first step in the process is to either call a realtor or a mortgage broker. The realtor will usually suggest you contact a mortgage broker to get a pre-approval, and a mortgage broker will usually work with you to get a pre-approval.
What is a pre-approval?
A pre-approval is an approval from a lender which basically acts as a rate hold for either 90 or 120 days. Most pre-approvals are not even looked at by a lender but rather an automated system that spits them out based on certain criteria being met such as credit score and income. There may be things on your credit bureau which prevent you from getting the mortgage in the end.
Getting a pre-approval, a lot of times means you are given a higher rate to begin with. Lenders will sometimes add a premium on to these applications. So if the going rate on a 5 year mortgage is 2.69% for example, the lender on a pre-approval may give you 2.79% or even higher.
What is it to be pre-qualified?
To be pre-qualified means you have spent some time with a mortgage broker with proper experience to advise you to go ahead and start looking at houses. When I pre-qualify a client there is a lot that goes in to it. I am looking at all the variables needed to make an educated decision on behalf of my client. Within the first couple of minutes of speaking to a client I can determine whether or not it is worthwhile proceeding with an application. I will say, most often than not I will proceed with an application, if not to help them get a house today then to offer advice as to what it will take to get in to a house down the road. Throughout the process I will take a look at our credit, income and debt servicing to determine whether or not you will be able to get a mortgage.
Not only will I pre-qualify you, I will watch rates on your behalf. Not having a pre-approval simply means you will be subject to rates increasing if it happens. I am constantly being notified if interest rates are scheduled to increase, usually on that note I will take my pre-qualified clients and submit them all for rate holds so they are not subjected to further rate increases. That way you are given the best possible chance of getting an excellent rate.
If you would like to find out what you qualify for give me a call at 403-945-8769 or follow this link for a quick response. http://www.shawnmooney.com/#!how-much-can-i-afford/au66d
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