If you're planning to buy a home this spring, getting pre-approved for a mortgage should be your first step. With the spring market being one of the busiest times of the year, a pre-approval gives you a competitive edge and helps you understand exactly what you can afford. Here’s what you need to know to get started.
What is a Mortgage Pre-Approval?
A mortgage pre-approval is a written confirmation from a lender stating how much they’re willing to lend you, based on your financial situation. It gives you a clear budget for house hunting and shows sellers that you're a serious buyer.
Why is Pre-Approval Important?
Know Your Budget – Avoid falling in love with a home that’s out of your price range.
Stronger Offer – Sellers are more likely to accept offers from pre-approved buyers.
Faster Process – Pre-approval speeds up final mortgage approval once you find the right home.
Lock in Interest Rates – Many lenders offer rate holds for 60-120 days, protecting you from potential increases.
Steps to Get Pre-Approved
1. Check Your Credit Score
Lenders use your credit score to determine your mortgage eligibility. A higher score can lead to better interest rates and loan options. If your score needs improvement, paying down debt and making payments on time can help.
2. Gather Your Financial Documents
Lenders will need to see proof of your income, assets, and debt. Be prepared to provide:
Proof of employment (pay stubs, T4s, or tax returns if self-employed)
Bank statements to verify savings and down payment funds
Information on existing debts, like car loans or credit cards
3. Determine Your Down Payment
In Canada, the minimum down payment required depends on the home’s price:
5% for homes under $500,000
10% for the portion between $500,000 and $999,999
20% for homes over $1 million
If your down payment is less than 20%, you’ll need mortgage default insurance, which protects the lender.
4. Shop Around for Lenders
Different banks, credit unions, and mortgage brokers offer varying rates and terms. It’s worth comparing options to find the best deal. A mortgage broker can also help shop for the best rate on your behalf.
5. Get Your Pre-Approval Letter
Once approved, you’ll receive a pre-approval letter stating your loan amount, interest rate, and term conditions. This document is valid for 60-120 days, depending on the lender.
Ready to Start House Hunting? Let’s Chat!
Having a pre-approval in hand makes your home search more focused, competitive, and stress-free. If you’re thinking about buying in Vernon this spring, I can guide you through the process and help you find the perfect home. Reach out today to start your journey!
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