Before beginning the bidding war on a potential property, it helps to have an indication of how much you can afford. Some home buyers don’t fully understand pre-approvals. Even if you obtain a pre-approval, it does not guarantee you will qualify for the financing.
The main benefit of a pre-approval is that it will give you a good idea of how much you can afford in addition to holding a rate for up to 120 days (this varies by Lender) thus protecting you from any sudden rate increases.
Typically, the following is required for pre-approval:
Personal Identification
- Current address
- Contact information (phone, fax, email)
- Social Insurance Number
Income / Employment
- Current employer, job and salary. 3 years history.
- Other sources of income (investments, pensions, etc)
Financial Assets/Liabilities
- Down payment amount and source (is it a gift, or from savings?)
Credit Check
- Your broker or bank will have to pull your credit bureau. Your credit score reflects your borrowing tendencies and will have an impact on the rate you qualify for