Why should I get a Mortgage Pre-Approval?!
Then it's extremely important that you arrange for financing before you go home shopping: get “pre-approved”.
To define getting pre-approved: Your lender has calculated how much of a mortgage they’re willing to offer you,depending on your down payment and current financial situation. CMHC says, "Before you begin shopping for a home, it’s important to know how much you can afford to spend on homeownership. You will want to plan ahead for the various expenses related to homeownership. In addition to purchasing the home, other significant expenses will include heating, property taxes, home maintenance and renovation as required. Two simple rules can help you figure out how much you can realistically pay for a home. You must understand these rules to understand if you will be able to get a mortgage."
There are SEVERAL advantages to having a pre-approved mortgage.
- You know exactly what you can afford when shopping for a new home.
- Many real estate agents may not show you any home until you have your mortgage pre-approval.
- When you make an offer, you’re likely to be taken more seriously.
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What's the BIG DEAL of a pre-approval?
Knowing the numbers and having the seller know that you are pre-approved means you can also negotiate more powerfully, obtaining the best possible price.
Also, if you are in competing offers: If several buyers are interested in the same property that you are, being pre-approved can give you the advantage. Sellers are more likely to accept an offer from a buyer who has been pre-approved over a buyer who has no guarantee that they can attain the financing for the amount they offered.
Posted by Paulette Upshall
on March 7, 2011