Often it is asked: why do I need to have a mortgage preapproval? “I know what I can afford, I know what I like, I’ll have no problems getting the home I want.” Only partially correct. In our previous blog, When is the best time to get preapproved for a mortgage, we reviewed that a preapproval should be completed when you first start thinking about purchasing a home. We advised that just because you have a down payment of 5% for your dream home, doesn’t mean that’s what you can afford.
Mortgage preapprovals are important for 2 reasons:
- When you do go shopping with your realtor, it gives them the reassurance that you can afford to purchase the homes you are looking for.
- More importantly, it gives you the reassurance that YOU can afford what you are looking for.
Your preapproval is a confirmation that your income, credit and down payment will allow you to purchase that dream home for $500,000. There is nothing more stressful than realizing that because you didn’t get a mortgage preapproval prior to putting the offer on your dream home; that the collections on your credit bureau will prevent you from purchasing. Or that the new car you purchased will not allow you buy for $500,000, instead you can only afford $425,000.
It is amazing a review with a mortgage broker can do to make this purchasing process go more smoothly.
Questions about your mortgage?
Blogged by Elise Hildebrandt, AMP, Mortgage Associate, Broker Lic# 316103 at The Mortgage Centre, Brokerage Lic #315847, Saskatoon. She has been in the financial industry for 16 years. Please contact her today if you have any questions about your mortgage at www.elisehildebrandt.ca.