20 May

How a Mortgage Pre-Approval Works to Your Advantage


Posted by: Garry Grewal

The advantages for home buyers to obtain a mortgage pre-approval.

Obtaining a Pre-approval

A mortgage pre-approval from a mortgage lender says you are approved for a mortgage before you have selected a specific property. You simply fill out a mortgage application and provide the lender with income documentation and consent to pull your credit report and evaluate your finances for credit worthiness. The lender will process your application like a traditional mortgage request and will advise you the amount of money that you can borrow.

Knowing Your Budget

One of the big advantages of going through this pre-approval process is that you now know your borrowing limit. You know exactly how much money you can borrow for your home purchase. You also know how much your mortgage payment will be. People often spend time looking at properties that they could never afford or be approved for but when you have a pre-approval in hand you know exactly which properties you should search.

Negotiating With Strength

Having a mortgage pre-approval will give you increased negotiating power. When you look at properties as a pre-approved buyer, real estate agents and sellers will treat you as a preferred customer. Buyers who are not pre-approved represent a degree of uncertainty for the seller so when you make an offer to purchase a property it will be treated as a priority because the seller knows that your offer will essentially result in a sure deal. This means that the seller can agree to your offer and get a guaranteed amount of money instead of wasting time on a potential offer associated with uncertainty of mortgage approval. If a buyer without a pre-approval is chosen, that buyer may not qualify for a loan in the amount that is needed so the sale would fall through and the seller would be right back where he started. Being pre-approved will automatically give your offer a lot more weight when it comes to negotiating with sellers and your odds of getting the house that you want will dramatically improve.

To get pre-approved, call me today at 416-674-5626 and let’s get started, or send me a quick email: garry.grewal@dominionlending.ca