After waiting and saving up for so long, you’ve finally decided that you’re ready to take the steps toward making your dream home a reality. Buying a home can be complicated and overwhelming at times, especially with all the changes in the market, not to mention, a vast number of eager buyers, all the paperwork and of course, an immense amount of expenses.
But don’t worry! Take a deep breath and know that you’ll be able to get through all of this by planning ahead and getting all the help you need throughout the process.
One of the best ways to start is by getting pre-approved for a mortgage before looking for the home of your dreams. This way, you’ll be able to narrow down your choices based on your price range, get a solid commitment from lenders and foresee your monthly mortgage payments ahead of time.
Now that you’re ready to make your home buying journey official, check out these 5 tips to get pre-approved for a mortgage.
What Not To Do:
1. Don’t Change Jobs
When you’re buying a home, you need to get your finances at its most stable and secured state. This heavily involves your job.
If you’re an employee who’s been wanting to shift to be self-employed or own a business, you might want to hold that thought for a while. It’s preferred to think of this option after buying your home. Shifting from having a regular income to having a self-employed income is a major switch that might cost you an approval.
If in case you ever get offered a job that pays higher, kudos to you! But before accepting the job, you might want to consult your mortgage broker, because this will make a huge difference in your finances and household income. Remember, aside from the pay, job tenure is also being considered
2. Don’t Move Your Money Around Too Much
One of the things your mortgage broker and lenders will take a look at are your bank statements. These documents will prove your ability to pay for your own home. Moving your money around too much may complicate things, especially when done in such a short span and right before you apply for your loan.
If you’re the type of person who has their eggs in many different baskets and moves them around frequently, you’ll have to prove that the money is indeed yours. Moreover, if you have a lot of bank accounts, be ready for the questions and corresponding explanations.
In the same way, it may also be tempting to make huge purchases for home appliances or even a car, but you might want to park that idea, until your deal is closed. Don’t deplete your cash flow. This is the time to stick with your budget.
While avoiding these not-to-do’s, here are some tips you must know when getting pre-approved.
What To Do:
3. Maintain Good Credit
One of the things lenders look at when you’re applying for a mortgage is good credit. This gives them an idea whether or not you’re responsible with your finances and what the level of risk is on their part, when they’ve lent you their money. A mortgage broker can assist if you have poor credit.
4. Secure Your Paperwork
Your lender needs to know your overall financial situation. In order to do this, they’ll ask for documentation of your income, assets, liabilities and debts.
Some of the documents you need to prepare are: pay stubs, federal income tax returns for the last two years, recent bank statements, investment account statements and other similar documents..
5. Trust Your Mortgage Professional
In getting pre-approved, you can get the help of a mortgage broker or work directly with the lenders. It’s highly advisable to tap the resources of a mortgage broker once you’ve decided to get your home.
Mortgage brokers have access to many lenders and can help you to get the best mortgage product according to your financial situation. They know the rates and terms that you can possibly maximize and can leverage and negotiate on your behalf.
In case you face any complications in regard to your finances or in the process of getting pre-approved, consult your mortgage broker right away! Don’t hide relevant information and be upfront and honest with them. After all they’re on your team!
Bottomline: Be a stand-out buyer by getting pre-approved
Whether you’re a first-time buyer or an experienced house-hunter, getting pre-approved for a mortgage will not only save you a lot of resources, but protect you from a possible heart break. This is an important milestone you need to achieve early on. Unfortunately, many buyers take this step for granted.
A pre-approval will make you stand-out and show that you’ve already made a good financial decision. In a hot housing market such as in the Greater Toronto Area and surrounding areas, this could make a difference as to whether or not you’ll be getting the home of your dreams.
Book an appointment now and consult with Daisy Raouph, a reliable mortgage broker and financial security advisor. Daisy Raouph will definitely help you get pre-approved for a mortgage and find the best mortgage products for you!