Getting a mortgage pre-approval is one of the best things you can do as you search for your perfect home. By pulling your application together, your Mortgage Broker will review your credit and income in determining your maximum purchase price. Your pre-approval should be fully underwritten by your Mortgage Broker. This means your credit history and income documents will be fully reviewed to make sure you are a fit for the lender once you have found your ideal home and have an accepted purchase sale agreement. We do not want any last-minute surprises which could jeopardize getting the keys on moving day!
Do pre-approvals hurt your credit score?
Having your credit bureau pulled for the purposes of mortgage financing is known as a “soft hit”. Your credit score will decrease slightly but not to the extent if you are applying for multiple credit cards or personal loans. The initial credit pull will be active for 45-days and any subsequent mortgage financing inquires will be treated as the initial inquiry.
How far in advance should I get pre-approved for a mortgage?
Mortgage pre-approvals last for 90 to 120 days, depending on the lender. Therefore, if you are starting the process or are actively looking for a new home, you should obtain a mortgage pre-approval through your mortgage broker.
Can you get denied after being pre-approved?
Absolutely! Many lenders who issue pre-approvals will simply run your numbers through their system and if you meet the minimum criteria, the system will issue a pre-approval certificate. This means that nobody has reviewed any of your documentation. This can be problematic. As previously stated, work with a reputable Mortgage Broker who will review everything before submitting your mortgage pre-approval request to a lender.
How many lenders should I get pre-approved with?
It is only necessary to get a pre-approval from one lender.
How long does it take to get a pre-approval?
If you have all the required documents for a full underwriting review of your file, it should only take 24-hours for you to receive your pre-approval certificate. If the real estate market is particularly busy, it might take up to 48-hours.
There are a couple of items we would like to point out:
1. Your pre-approval certificate will be at a rate slightly higher than the most competitive rates. This is because a pre-approval is also a rate-hold. This means that the lender will guarantee this rate when you convert the pre-approval to a “live-deal.” Therefore, lenders do not want to have too many commitments out there if mortgage rates increase. Never fear – when you have a live deal, we will get you the most competitive rate at that time.
2. Your pre-approval certificate will be for a slightly lower amount than your actual affordability. This will give you some flexibility when shopping, so you are not “maxed out.” Please confirm your maximum purchase price with your Mortgage Broker before you submit our offer.
When planning for your pre-approval, there are lots of great online resources available. Check out our great mortgage pre-approval calculator to help you understand your potential maximum purchase price. If you’d like help or more information please email us at info@TheMortgageGuyNiagara.com or book a no-obligation consultation.