Pre Approved Mortgages
Yes, you have to be pre-approved for a mortgage.
I know many fabulous mortgage brokers I can fit you with, someone who will help guide you through this process. Mortgage rules are constantly changing and a pre-approval is usually only good for 90 days. Many home buyers think that because five years ago they were approved for a certain amount that they will automatically be approved again. That is not the case. It doesn’t take long and, as a home buyer wanting to make an offer on a home, one of the first things a listing agent will ask a Buyers agent is “are they pre-approved?” It is imperative for your negotiating position that you have this already in place. If I answer “yes”, the next question will be “with who?.”
It is a small town and your confidentiality is safe with my trusted mortgage brokers but I need to answer these questions honestly as my reputation as a buyers agent is second to none and I strive to keep my reputation solid.. I am essentially vouching that you are good for this when I have that initial conversation with the other side and one of the reasons I feel my offers are very well received is because of my rapport and reputation. If I say it I mean it and it is always in my clients best interest to be upfront on the financing end. There are many other factors that can be used in negotiations and to get you out of an accepted offer such a a home inspection. Not liking the mortgage rate but being pre-approved for the offering price well, that is a non negotiable! No home seller wants to tie up their property and waste valuable days on market for a buyer who hasn’t the courtesy to get a pre-approval.
Brokers may or may not require an appraisal. You may be approved but the property also needs to qualify. Your offer should contain a “subject to financing” clause allowing enough time for your mortgage broker to collect paperwork from yourself, the ‘Bank of Mom and Dad, and the details required from the property based on that specific lender’s requests.
Even if the bank says Yes, no problem, and if you are putting less than 20% down then a mortgage insurer such as CMHC or Genworth will also need to approve the property. This can take an extra few days, so be kind to the broker If a bank has said they can get you the financing no problem and, if a broker hasn’t given us the 100% yes, it is because it is going through the channels. The same channels a bank needs. We typically have two weeks for the financing clause.
I send the agreement to purchase and property details to your mortgage broker. If an appraisal is required, the mortgage broker will arrange the appraisal with the listing agent to access the home. Once your broker gives you the solid go-ahead, then we can remove your “subject to financing” clause. Until then hold tight and know we are all working together to make this happen for you. Unless you have the cash in the bank, then this is the process!