>> When you’re shopping for a new home, your bank or credit union should be your first stop. Getting a pre-approved mortgage helps ensure that your financial house is in order when you make an offer on your dream home. And it gives you a clear pic- ture of what you can afford. “It allows our members to shop with con- fidence,” says Andrea Waenink, vice-pres- ident of sales and service at Steinbach Credit Union. The pre-approval process involves re- viewing your income, credit history and assets and liabilities. Lend-
ers use this information to determine the mortgage you can afford and as-
sign an interest rate. Most financial institu-
tions guarantee your rate of interest for a set period of time. That way, if rates start to rise, you won’t feel pressured to buy before
you’re ready. Waenink also recommends that you look at your long-term financial situation and consider upcoming expenses or plans that may affect your spending ability, such as vacations, retirements, university tuition or new car purchases. Once you’re pre-approved for a mort- gage, you’ll receive a letter which you can submit with offers on homes in your price range. Proof that you’re pre-approved for financ- ing strengthens your position, but you should still make all offers conditional on final approval. This protects your down payment in the event you can’t follow through on the purchase. After you’ve made an offer, and it has been accepted, your lender will verify the information you provided for pre-approv- al and send it to their credit department. Buyers making a down payment of less than 20% of the home’s selling price must take an extra step at this stage — apply- ing to the Canadian Mortgage and Hous- ing Corp. (CMHC), which insures mort- gages for financial institutions.
The pre-approval process involves reviewing your income, credit history and assets and liabilities. Lenders use this information to determine the mortgage you can afford and assign an interest rate.
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