Pre Qualify For A Mortgage…FAST, EASY, APPROVED!
The banks will no longer pre qualify people for mortgages because less than 1% of the people stayed with the bank that pre-approved them. At best, a lender will take a quick look at the application for any obvious problems and issue a rate hold. They still call it a pre-approved mortgage, but in reality it is no more than reserving your rate for 90 days or so.
From a consumer’s point of view this presents a problem. You could go through the whole process of finding a home, make an offer and commit yourself emotionally, only to find out in the end that your mortgage might not come through.
A bank will do a verbal application based on the information it is given and submit it for approval. They will only look into the application in more detail only after you have put in an offer to purchase and given them a copy. At that point, you might not qualify at all, you might qualify for a lesser amount or you might qualify if you provide once you provide addition satisfactory information.
The paper the bank gives you saying that you pre-qualify is always conditional. If you read it carefully, you will realize that they did not say that you pre qualify. Actually, they say that they want more information which will determine whether you qualify or not. Most bankers neglect giving you the proper guidance at this stage because it is only a “potential” deal for them. Once you have an accepted offer with a 10 day financing delay, you will be surprised that the approval process may take anywhere from a week to three weeks if the documents are readily available. If you have to go to your accountant or dig up several months of bank statements it will take that much longer.
Every mortgage is ratio based and is a formula based on your credit score, income, expenses (debts) and property taxes. To get a proper pre-approval, all of these factors have to be analysed and taken into consideration from the beginning.
Let me give you an example: image you tell the bank that you make $45,000 a year and have no debts and get pre-qualified for a house of $200,000. You will start to shop for a house at that price and when you find something, you will make an offer and expect you mortgage to get approved. Once you go to your bank and give them the documentation they see that you have only been working for 6 months at your job and that your salary is $36,000 + commissions. You also have a credit card with a $150 minimum payment. The banker will call you into his office and tell you “Unfortunately at this point you do not qualify for the purchase of this home...Sorry”.
There is another way. You need to know for certain before you go shopping.
A meeting with one of our licensed professionals will take the doubt out of this process. An experienced mortgage broker will know which bank will accept the type of income, credit rating and the down payment you are using to qualify. When you shop at your bank, you are subject to only their products and regulations. We can offer you the best options from over 20 different lending institutions. Even in borderline cases, we can often persuade lenders to qualify you by considering factors that may not be obvious. You would be amazed how many times a broker can qualify you for a better interest rate or an approval that would normally not happen. We take the time to get to know your circumstances and present the facts in the best light to the bank. In many cases, this can make all the difference in the world. Especially if you have had any kind of credit problems in the past, it is definitely in your interest to get a free opinion from one of our mortgage brokers.