Secure Your Home Financing with Confidence

So, what is a mortgage pre-approval, and is it important? What’s a pre-qualification?  Do they equate to the same thing? There are a variety of different terms for it, but a true pre-approval is essential for homebuyers in Canada.  It allows you to shop for a home with confidence, knowing what you can qualify for, and what the pre-approval process will look like.  While it’s not mandatory, it’s something we highly recommend.

The Pre-Approval Process:

1. Initial consult with your Concourse Mortgage Group broker.  General information is reviewed so your broker can get a feel for what your financial situation is, as well as your needs and wants in a home.

2. Mortgage application is sent.  This application takes only 10-15 minutes, and once completed, your mortgage broker may request a few supporting documents up front.

3. Assess and analyze.  Once your application is completed, and documents have been collected, your broker will assess your financial profile.  There are three key components in qualifying for a new purchase:

a.  Down payment:

  1. How much, and where is it coming from?  Down payment can come from a variety of sources such as savings, RRSPs for first time home buyers, FHSA (first home savings account), TFSAs, gifted down payment, and even borrowed or “flex down payment” in some cases.
  2. Minimum down payment is 5% for any purchase price up to $500,000.  Any amount above $500,000 requires 10% just for that portion.  Purchases above $1,000,000 require 20% down as a minimum.
  3. Any purchases with less than 20% down payment will require mortgage default insurance.

b.  Income:

  1. Requirements for income, and what can be used, vary greatly depending on your source of income.  Salaried? Self employed?  Contracted?  Hourly?  No two mortgage applications are the same, which is why a mortgage pre-approval is so important.  We will assess your income type and determine what can be used towards qualifying.  To do so, additional documentation may be requested up front, such as letters of employment, pay stubs, T1 Generals (tax returns), Notice of Assessment, etc.

c.  Credit/debt:

  1. The “5 C’s of credit” are of utmost importance to your financial profile.  Character, capacity, capital, collateral, and conditions.
  2. Are you paying your credit cards and other debts on time and not carrying large balances month over month?  Try not to exceed 50% utilization.
  3. Upon review of your credit report, your broker may make recommendations to assist with qualifying and how to “better position” your file.

Benefits of a Pre-Approval:

  1. Know your budget – It’s much easier to shop for a home knowing what you can qualify for.  Your Concourse Broker will assist as you’re searching for homes by crunching numbers on any listings that may be near your pre-approval limit, or your max loan amount.  Given pre-approval budgets are estimated based on property taxes and heat, your mortgage broker can stay involved to let you know what it would take to qualify for particular properties, or what mortgage you could afford.  They will also be able to tell you what your mortgage payment would be as well as closing costs to help you budget.
  2. Competitive edge – When searching for a home, sellers may be more receptive to an offer in which the prospective buyer has a pre-approval on hand.  This is especially important in a seller’s market, where they may be looking at multiple similar offers.  A pre-approval can make your offer stand out.
  3. Faster closing – Turning a pre-approval into a “live deal” (once there is an accepted offer) is a quick process.  In addition, your mortgage broker will have fully prepared you for what will be expected by the lender once your deal goes live.  This again may be very important in a seller’s market, where you may need to facilitate quick closes or short “condition of financing” periods.
  4. Rate protection – perhaps the biggest factor in determining what loan amount you can qualify for is the interest rate you receive.  A pre-approval can typically hold an interest rate for 120 days, meaning your possession would need to fall within 120 days of it being issued.  In a rising interest rate environment, obtaining a pre-approval and locking in an interest rate can be hugely beneficial both in how much you can qualify for, as well as the interest rate you receive.

Why choose Concourse Mortgage Group for your Pre-Approval?

  1. Expert advisors – As one of the top producing teams cross-Canada in our brokerage, we have a team of expert advisors, with immense experience.  We strive to create a great experience for our clients by fully preparing them up front to ensure there are no surprises throughout the process.
  2. Access to Multiple Lenders – As part of Invis and M3 group, we have a network of over 50 lenders.  This includes big banks, monoline lenders, credit unions, trust companies, etc.  It’s simple – do you think you have a better chance at getting the best interest rate by walking into one bank, or using a Concourse broker that can access dozens of lenders?  Let us do the shopping for you!
  3. Customized solutions – No two mortgages are alike, nor are any two financial plans.  Yes, your mortgage is a key component of your financial plan.  Concourse Mortgage Group will tailor your mortgage to your overall financial plan.  We are strategic in our approach.  We are also experts in structuring mortgages most efficiently to meet lender and insurer guidelines to put our clients in the best position possible to qualify for what they’re looking for.  Access to dozens of lenders allows us to access even more mortgage products to create this customized mortgage for you.
  4. Transparent Process – As mentioned, our goal during the pre-approval process is to make sure you’re fully prepared and comfortable throughout.  We get…some people find the home buying process stressful, so our goal is for our clients to look back at the process and think “hey, that wasn’t so bad!”  There’s a chance you might even have fun…after all, this is supposed to be one of the most exciting journeys in your lifetime.

Ready to Begin Your Homebuying Journey?

Contact us to begin:

Walk-in – come see us at 138 Mahogany Plaza SE! We’re in office from 8:30-4:30 Monday to Friday, unless we’re out meeting clients.

2. Online Pre-Approval Application

  • If you’re keen to get going right away, we encourage you to use our online application found here:
    • By completing this application, this allows us to use the first meeting with actual numbers and details pulled from your application.  Super convenient, and super efficient!