Updated Jan /18:

New year, new rules. As of Jan 1st, new borrowers (with or without 20% downpayment) and those who are refinancing existing mortgages (wanting to add money for a reno, for example), are going to have to pass a stress test in order to qualify. Want to talk about it? Give me a shout!

More info here: Guide to New Rules

Are you serious about buying a home? Whether you’re a first-time home buyer or a move-up buyer, getting pre-approved for a mortgage is critical.

Why Pre-Approval?

First and foremost, you don’t want to fall in love with a home only to discover later that you can’t get the financing.  With a pre-approval you know exactly what you can afford and won’t be looking at homes in the wrong price range. If you’re working with a Realtor, they’ll insist on a pre-approval before taking you out to see homes. 

Also, being able to show that you are pre-approved is good sign for any home seller.  A pre-approval letter can set you apart from other home buyers, especially in the seller’s market that parts of Ottawa are currently experiencing. What is a seller’s market?  It’s when competition is fierce as the number of buyers exceeds the number of homes available for sale. It’s a time when buyers need to be on top of their game if they want to secure the home they’re considering buying. In this market, your offer needs to shine above the competing buyers and a pre-approval is just one way in which to do that.

What Is A Pre-Approval?

A pre-approval is a written letter from your lender of choice that indicates your ability to finance a home purchase.  The letter will detail that you have been conditionally approved for a mortgage loan based upon a review of your assets, income and debt. The letter will conclude that the approval is subject to such items as your final verification of your employment & income prior to closing, the funds required to close on your home purchase, that the home you buy must appraise to support the purchase purchase,  that there has been no change to your credit profile (see *), etc.

The letter confirms that your assets, income and creditworthiness have been reviewed and based upon the Lender’s findings, you are a good a candidate for final loan approval.  Keep in mind that this does not guarantee your ability to get a mortgage, but rather enhances the strong likelihood of getting a mortgage.

When Do You Get A Pre-Approval?

Have you made the decision to buy a home? Have you made all the preparations required to get your credit in order? Have you saved money towards a down payment, closing costs and simply for being a new homeowner? If you’ve answered “yes”, then now is the time to get a mortgage pre-approval before you even take a step inside a home you think you like or might like.

Getting a pre-approval can get you the home you love. Are you ready? Now go buy a home!