Understanding How to Get A Pre-Approval Mortgage Richmond Hill

The pre-approval of mortgage is the first step that you should take when looking for a house to buy. It puts you ahead of the competition. Before you receive a mortgage for your humble abode in Richmond Hill, there are a lot of steps that you have to go through, one of them being the “pre-approval” stage. There are a lot of different sources where you can go to seek mortgages, such as:

Ø Banks

Ø Mortgage firms

Ø Insurance companies

Ø Trusts

Ø Loan firms

Ø Credit unions

The rate of interest and conditions will vary from lender to lender for same product. You should establish contact with more than one lender in order to evaluate your options and choose the best one. There is no harm in changing your lender in the initial stage of the mortgage. You just have to make sure that you are comfortable with them and that both of you are on the same page. You have to also remember to read the terms and conditions carefully to avoid any problems in the case of pre-approval mortgage Richmond Hill in the future.

The process of pre-approval

The pre-approval is the process of the lender looking at your finances to decide the maximum amount they can lend you for your use and what interest rate are they charging you. With the process of pre-approval completed, you will be able to:

Ø Know the maximum amount of mortgage that you can apply for

Ø Estimate the payments of your mortgage

Ø Lock in the rate of interest for 2–4 months, depending on the lender.

The amount decided at pre-approval might be the maximum amount that you are getting. A pre-approval does not guarantee that you are sure to get a mortgage loan of a particular amount. The mortgage amount that is approved will depend on the value of the home that you are planning to buy and on your down payment. It might be helpful if you choose a house in a low price range so that your budget is not stretched to its maximum limit. Choose a house keeping in mind that you will also need to pay for (i) closing costs, (ii) moving costs, and (iii) the ongoing maintenance costs.

Before giving you a pre-approval mortgage Richmond Hill, a lender has to take note of your current assets, your current income and your present debts if any. Here is a list of a few documents that you will have to provide your mortgage broker with to get yourself a pre-approval:

Ø Your identification proof

Ø Your proof of employment

Ø Some proof that you are capable of paying the down payment and other costs

Ø Information of other assets that you own, like car, house, boat, etc.

Ø Information of your debts or any other financial obligations, if any

Your mortgage broker in Richmond Hill will also need the proof of your employment, and will ask for the following documents:

Ø Documents mentioning your current salary or hourly pay scale

Ø Your designation and tenure in the organization

Ø Notices of Assessment from the Canada Revenue Agency for the last two years, if you run your own business

To qualify for mortgage payment, you will have to prove to your mortgage broker that that you are fully capable of affording the amount you are asking for. The mortgage broker will also evaluate your financial information and calculate your monthly cost of housing and total debt load. Make sure that your mortgage broker gives you in written that you qualify to get a mortgage loan from the lender.