Mortgage Pre-Approvals are NOT Guarantees of a Mortgage!
I recently had the pleasure of interviewing Chad Watts of The Mortgage Group about mortgage pre-approvals. He brought up a very important point for Buyers, particularly First Time Home Buyers. And that is a mortgage pre-approval is NOT a guarantee that you will get a mortgage at the amount the Lender originally mentions or get a mortgage at all.
What is a Mortage Pre-Approval?
This is a preliminary estimation by a Lender of how much the Lender will loan you based on very basic information. This number is subject to change based on what property you get an accepted offer on and the details of your financial situation.
Why Your Mortgage Pre-Approval may not match the Mortgage You Get!
A mortgage pre-approval is a basic guideline of generally how much a Lender thinks they can give loan the Buyer. Once the Buyer finds their dream home and have an accepted offer subject to financing on the property they need to forward the offer onto the Lender. The Lender then begins to go over all the details of the property and the Buyers financial situation with a fine tooth comb. This is often where the disparities between the Mortgage Pre-Approval and the actual mortgage pop up.
Too Much Debt, Inaccurate Financial Information, Unpaid Taxes, and Leaky Condos
There are certain buildings that Lenders will not lend money on for various reasons (Its a leaky condo, its not worth what the accepted offer says its worth, there are issues with title). Sometimes the information the Buyer originally provided the Lender is not accurate or out of date (Buyer is behind on their taxes, or doesn’t have as much money as they thought, or may have too much debt). Both of these variables can result in the Buyer either not getting a mortgage at all or not getting as large a mortgage as they had anticipated.
The CHMC has a cool tool that you can use to test your financial situation to see if you are ready for home ownership that you might find useful.
Totally off topic – Check out the Tightrope Walker in the background of the video!
I REALLY APPRECIATE COMMENTS AND I’D LOVE TO HEAR YOUR THOUGHTS!
Tags: Borrower, Chad Watts, Do I Need to go to the Bank before I Buy a Condo, Do I Need to go to the Bank before I Buy a House, Financing and Pre-approval, First Time Home Buyer Tips, First Time Home Buyers Advice for Vancouver, First Time Home Buyers Mortgage Advice, How do I get a Mortgage, How to Get a Mortgage in Vancouver, Lender, Loan Preapproval, Mortgage Borrower, Mortgage Broker, Mortgage Information for First Time Home Buyers, Mortgage Lender, Mortgage Lending, Mortgage loan, Mortgage Pre-Approval, Mortgage Pre-Approval Canada, Mortgage Pre-Approval Vancouver, Mortgage Preapproval, The Mortgage Group, Vancouver Mortgage Broker, What is a Mortgage Pre-Approval
[...] mortgage broker to find out how large of a mortgage you can get. The bank or broker will give you a mortgage pre-approval which is a rough estimation of what you can borrow. This mortgage pre-approval is based on the [...]
Love the tight-rope walker in the background.
Hi Anonymous!
LOL! So do I, glad someone spotted it.
The guy was good, but we didn’t catch much footage of him on the rope!
Good to hear from you and thanks for commenting!
[...] you’ve gone to the bank or met with your mortgage broker and you’ve been pre-approved. Now you know what you can spend, now you need to decide where you want to [...]
[...] you’ve gone to the bank or met with your mortgage broker and you’ve been pre-approved as we discussed in Episode 1 of First Time Home Buyers Guide Vancouver. Now you know what you can [...]
[...] mortgage broker to find out how large of a mortgage you can get. The bank or broker will give you a mortgage pre-approval which is a rough estimation of what you can borrow. This mortgage pre-approval is based on the [...]