Home Buying Guide: Mortgages & the Pre-approval Process
Before approaching lenders you should familiarize yourself with some basic mortgage concepts.
Pre-approval of a mortgage is when your lender has reviewed all your financial information and has determined the maximum amount of money you can borrow. The advantages to pre-approval include:
Many banks and financial institutions are competing for your business so it makes sense to shop around for a mortgage. Most lenders will reduce their posted interest rate so don't be shy about bargaining. Your ability to bargain for a low rate and a flexible mortgage will often depend on how much business you have with the institution. You can contact banks and credit unions directly, or work with a mortgage broker. A broker will help you find a lender and the best mortgage package.
Once you have selected your lender, you will need to provide your financial information. Your lender will want the following:
Once your application is complete, you will know how much you can borrow and you will be ready to start searching for a home. For more information, contact your Realtor or your financial institution, or log onto the Canadian Mortgage and Housing Corporation and the Canadian Bankers Association web sites.