What About My
Mortgage
Pre-Approval?
Cindy Mason, Mortgage Broker
The Mortgage Domain
Office: 416-410-0900
cindy.mason@themortgagedomain.com
A
lthough going through
the pre-approval process
is important, the actual
term ‘pre-approval’ is often
misunderstood.
An important point to be clear
on is that while you may be
pre-approved for a certain
mortgage amount, there are
several variables that can
derail a final approval once you
write an offer on a property.
As such it is imperative that
offers include a condition (or
‘subject’) clause along the
lines of ‘subject to receiving
and approving satisfactory
financing’.
of a current credit report
and review of all required
income and down payment
documents. You should have
a clear understanding of the
maximum mortgage amount
you qualify for along with
clarity on the various related
costs involved in your specific
transaction.
days later, without warning.
Pre-Approvals are not always
grandfathered
when
the
lending rules change.
So yes, request a pre-approval,
as it gives you a good idea as
to your maximum mortgage
amount and locks down a rate
for you. Always a worthwhile
endeavour. It may also allow
you to address a few smaller
issues with ample time prior
to writing your offer. Small
issues today can be big issues
when in the middle of a live
transaction.
With
most
lenders
pre-
approvals involve no formal
live review of documents, but
your Mortgage Broker can
preview them to catch any
significant areas of concern
such as:
Bottom line, please be aware
• Unfiled taxes
that aside from these key
• Unpaid taxes
advantages, a pre-approval is
• Employment still in a
not a guarantee of mortgage
probationary period
financing.~
• Clarity around down
payment origins
This is arguably the single
most important clause in a Ultimately the property forms
contract (an inspection being a significant part of a mortgage
a close second), because approval, and so until an
without the financing, how will offer is written on a specific
you complete your purchase? property, no true approval can
The
pre-approval
process be offered.
should be considered more Furthermore,
government
of a personal pre-screening changes to lending guidelines
process than anything. It and policies can render a pre-
should include a lender review approval invalid just a few