What is a mortgage preapproval?
When looking for a mortgage, you may examine the choices provided by various lenders.
Lenders have a procedure that may allow you to:
Learn at Mortgage Solution to know how much of a mortgage you can get and how much you’ll have to pay back. Lock in an interest rate for 60 to 130 days, depending on the lender.
The preapproval process for a mortgage may be broken down into many parts. Mortgage prequalification or mortgage preauthorization are other terms for the same thing. For each phase they offer, various lenders have different definitions and requirements.
The lender examines your financial situation to determine the maximum amount they can offer you and at what interest rate. They will likely ask for your personal details, certain papers, and a credit check.
This procedure does not ensure that you will be approved for a mortgage.
Where to get a mortgage preapproval in Canada?
You can get a mortgage preapproval in Toronto, Brampton, Mississauga, Peel Region from mortgage lenders and mortgage brokers.
Mortgage lenders
Mortgage lenders lend money directly to you.
Mortgages are available from several types of lenders, such as:
- banks
- caisses populaires
- credit unions
- mortgage companies
- insurance companies
- trust companies
- loan companies
For similar products, various lenders may have varying interest rates and terms. Speak with a few lenders to ensure you’re obtaining the best mortgage for your circumstances.
Mortgage brokers
Mortgage brokers do not lend money to you outright. They facilitate transactions by locating a lender on your behalf.
Some lenders exclusively sell their goods to customers directly, while others only sell mortgages through brokers. Because brokers have access to a variety of lenders, they may be able to provide a greater selection of mortgage packages.
Not all mortgage brokers have access to the same lenders. As a result, the mortgages provided differ from one broker to the next. When working with a mortgage broker, inquire about the lenders that they work with.
What to provide to your lender or mortgage broker?
Before preapproving you, a lender or mortgage broker will look at:
- your assets (what you own)
- your income
- your level of debt
You’ll need to provide the following:
- identification
- proof of employment
- proof you can pay for the down payment and closing costs
- information about your other assets, such as a car, cottage or boat
- information about your debts or financial obligations
For proof of employment, you may have to provide:
- a proof of your current salary or hourly pay rate (for example, a recent pay stub)
- your position and length of time with the employer
- notices of assessment from the Canada Revenue Agency for the past 2 years, if you’re self-employed