Pre Approval - Why You Should...

A mortgage Pre-Approval is an important first step toward getting a mortgage for two reasons:

-The pre-approval will give you a good idea of how much of a mortgage you can afford.

-The pre-approval will hold a rate for up to 120 days therefore protecting you from any rate increases.

Pre-approvals are:

- FREE, No Obligation
- Guaranteed to be the Lowest Interest Rate for 120 Days
- Fast and Easy - Short Form Takes 10 Minutes to Complete

Your mortgage pre-approval will be based on the information given and the supporting documentation provided by you. Please answer all questions honestly in this way we can work together to get you pre-approved at the best rate and terms. Our job is to shop the mortgage lenders on your behalf. As a mortgage broker we represent the client first! That is our promise to you!

When lenders are deciding whether you qualify for a mortgage loan, there are six factors that count the most:

Income
Debts
Employment history
Credit report
Identity
Property's value


Income

The lender will be interested in know what is the source of your income. Does it come from a salary, hourly wage or from commission? If you are commissioned or self-employed you may need a specialty product. This can be discussed with your mortgage agent. When you're applying for a loan, the lender will look at your 'gross income'. Your 'gross income' is all the money you earn before taxes, including overtime, commissions, dividends and any other sources. You must be able to show a steady history for these sources. For example, many lenders will count income from a part-time or seasonal job as long as you can show on your Notice of Assessment (CRA) that you've had the job for at least two years. One important thing your lender will do is compare your housing expenses now to the expense you'll have if you buy a home. The smaller the increase, the stronger your application looks.


Debts

In addition to your income, a lender will look at your debts. Generally your debts include your house payment as well as payments on all loans, charge cards, child support, etc. that you make each month.


Employment history

Lenders are more likely to lend money to people who have worked for several years at the same job, or at the same type of job. However, if you've only been in your current job a short while, this won't necessarily stop you from getting the loan, as long as you've had regular income over the last two years. The lender will check your employment, usually by asking your employer to sign a statement that shows how long you have been on the job and how much money you earn. If you're self-employed, or if you've been at your job less than two years, the lender may ask you for additional information (such as federal income tax statements) concerning your income and work history. These are the kinds of questions a lender considers when reviewing your loan application (A steady, secure job will make your loan application stronger):

Have you been at the same job for at least two years?
Have you been in the same occupation for at least two years?
Have you had gaps in your income over the last two years?
Is the co-borrower (if any) employed?


Credit report

Good credit is very important in qualifying for a loan. In addition to your ability to pay (as indicated by your debts and income), a mortgage lender will look at your willingness to pay. This will be judged by your credit record - that is, how well you've paid your loans and other debts in the past. When you apply for a mortgage, We will order a credit report. If you have had credit problems in the past it would be a good idea to order a copy of your credit report in order to check that these issues have been resolved. It will also show your record of payments on loans, charge cards and other similar debts.


Property value

When you choose a home, the lender will want to know that the house is worth the price you plan to pay. In fact, the loan amount that the lender approves for you will be based on the value of the property. The property is a lender's security for the money they lend you - even if you stop making mortgage payments. If you stop making payments, the lender has the right to sell your home to pay off the loan - a process called "foreclosure". The lender wants to know that the property could be sold to cover the mortgage amount.


Identity

Identity theft is a growing problem in Canada for both individuals and for lenders. To make sure no one is falsely using your identity to borrow money for a home, your lender or/and your lawyer will ask to see photo identification.


Call Tony Dhami 905 515 8587, or Sunil Khanna 905 719 7773.

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