Searching for a Toronto condo for sale? Make sure you go to a bank or mortgage broker first and understand these key terms. Pre-approved and pre-qualified are two common terms you hear when it comes to getting a mortgage. However, they are very different things.
A pre-approval takes about 15 minutes and involves a few quick questions. You end up with a rate guarantee and an idea of how much money you can borrow. The rate guarantee is based on you being able to prove you qualify for the mortgage when you need it. In the event that there is a difference between what you said and what the mortgage lender can accept, you may lose your rate guarantee. You don’t need to show any income documents, a credit report, or your downpayment or equity.
Getting pre-qualified takes longer and means you have to show your mortgage professional some paperwork. Your mortgage professional will review your application, your credit report, and the documents needed to prove your income and downpayment or equity.
You will need to be able to explain any items in your credit report and show how they were resolved. Your mortgage professional will calculate your debt service ratios and your mortgage professional will be able to provide an accurate idea of the amount of mortgage money you can borrow. The professional will also be able to help you decide what type of mortgage would meet your needs.
When it’s time to make a mortgage decision, either for buying a home or refinancing a home, being pre-qualified will give you peace of mind knowing that you can afford your decision! If have any questions regarding mortgages or want to know the best rates currently on the market, call the Armstrong Condo Team first!