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What is it?
What is a pre-approval? What is a pre-qualification? What are the differences between the two
and what are the benefits that come along with them? I am going to walk you through these
questions and help you get a better insight on this important topic.
Pre-Approval
A pre-approval is when you fill out a formal mortgage application provided by your broker/
lender. This is an in depth application including personal and financial information including but
not limited to: Your current/ previous employment status, List of all assets and liabilities, An
authorized pull of your credit bureau and its review, Down payment information, etc. Along with
this information will be supporting documentation you must provide, such as: Last 2 years T4,
Last 2 years NOA, Last two current pay stubs, Current job letter, ID, Last 3 month bank
statements. More and/or different information and documentation may be required depending on
your current financial situation, employment status, as well as lender specific requirements.
Once your application is ready we will send it off to the chosen lender that best suits your needs.
The lender will do an in depth review of your application and current financial situation. After a
lenders review, they will provide you with a specific amount based on the above information that
you are pre-approved for. With this the lender will lock you into an interest rate, with this you will
receive a conditional agreement that is typically good for 120 days. This will allow you time to
find a home and close. Benefits of getting pre-approved includes: Knowing your borrowing
capacity, Mortgage financial planning, Locked-in interest rate, More credibility as a buyer, And
peace of mind while in the home buying process.
Pre-Qualification
Getting pre-qualified however is much different. This process is much less in depth and more
general. Being pre-qualified will provide you with a general estimate of the loan amount you
could qualify for. For this you only need to provide basic information, such as: Where you plan
on buying, How many buyers there is, Are you planning on buying a house or a condo with
strata, Are you planning on renting out the home or a portion of it, Any outstanding balances on
credit cards or lines of credit, If you have a car loan and/ or lease, And their amounts and any
other loans, Current employment status, Estimate of your credit score, And gross household
income. With this basic information we can provide you with a general estimate of what you
could qualify for. A pre-qualification does not give you an exact amount you could qualify for, this
does not lock you into an interest rate either. This process can be done over the phone in just
minutes.
Summary
In summation, both getting pre-approved and/ or pre-qualified have their advantages. However
you have to find which option is best for you. If you are a serious buyer a pre-approval is always
best, as we will need the application and information regardless to be able to get you a
mortgage and into a home. If you are just wanting an idea but don’t yet want to commit to a
pre-approval, getting pre-qualified is a great first step. If you or anyone you know is looking for a
pre-approval or just wanting to get a general idea of what they could qualify for with a
pre-qualification, please feel free to reach out. I would love to help!
if you want more information about an Mortgages in the Fraser Valley, don’t hesitate to message me, Matthias Alleckna on Facebook or Instagram. As your local real estate professional for White Rock, Surrey and the entire Fraser Valley I am happy to lend you my expertise. Check in every week on the website blog for more engaging content.
Ashley Crowhurst
#MB600232
Mortgage Broker
6321 King George Blvd
P (604)-845-3340
E Ashley@sf-g.ca
Mortgage Architects – A Better Way
