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Pre-approval is a standard step that prospective homeowners must complete before they go house hunting. This stage lets you know how much a bank is willing to lend you.
Getting pre-approved is a detailed process that requires extensive documentation. In addition, your mortgage rate has an expiration date. If house shopping lasts longer than you anticipate, you may have to get another pre-approval. Here is what you need to know.
What Is a Mortgage Pre-approval?
During a mortgage pre-approval process, a lender reviews your financial status, including your income, assets, debts, expenses and credit score. Unlike a mortgage pre-qualification, which tells you how much financing a lender might extend, pre-approval is a commitment to loan the funds under certain conditions.
When Should You Apply for Pre-approval?
Typically, mortgage pre-approval is valid for a set term such as 60, 90 or 120 days. Because the house hunting process may take some time, it is a good idea to get a pre-approval as soon as possible…
After years of seeing countless articles and posts about interest rates, housing affordability issues, mortgage stress tests disqualifying some people from being able to buy, higher personal debt levels, does it still make sense to buy a home?
Yes! There is positive news. You can still buy a home. And you can still qualify for a mortgage.
And renting should scare the life out of you as rents are hitting ridiculous levels.
Here are some numbers for you to consider
Today, a household annual income of $70,000 will qualify you for a $300,000 mortgage. This will cost you between $1,278 and $1,520/month depending on product selection and rates.
Let’s look at Guelph, Ontario. A 1,500-square-foot townhouse will cost you over $2,000/month to rent. Or, you could buy that townhouse for around $458k. And with 20% down, your mortgage will carry for between $1,560 and $1,856/month.
In Ontario, we have a few problems. There is a limit as to how much a landlord can increase the annual rent. This has been between 1% and 2%, on average, during the last 25 years…