What can you get approved for?
...Pre-Approvals, Pre-Qualifications and Affordability Estimates...
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vFiguring out what you can get approved for is always a great (and logical) place to start when shopping for a new property. You could already own property and also want to review refinancing it to buy another property, fund an investment, pay for education, pay of renovation...etc.
Helping individuals determine what they can borrow is a common part of the job that Rob regularly does for clients. To determine what someone can be approved for it is most commonly going to involve an analysis of the following variables (more details on this at bottom): ->Obligations of the borrower(s) ->Income of the borrower(s) ->Assets of the borrower which primary focuses on investments, savings and property(properties) owned of the borrower ->The property (or potential property) you are looking to borrow against ->Credit rating and repayment history of the borrower(s) ->Interest rates available at that point in time The best place to start is to send an e-mail ([email protected]) or just call (613- 620-2562) to advise us you are intersted in reviewing your borrowing options. E-M |
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What Is A Pre-Approval?
Often used when shopping for a home, a pre-approval will yield more certainty of what a borrower can be approved for than other methods. All of the inputs used (as noted in points above) in the analysis need to be evidenced by documents (not just word-of-mouth) and the credit report of the borrowers will be pulled (not just word-of-mouth).
Rob puts those collected details together and coordinates with one of the lenders to determine what dollar amount the borrower can be "pre-approved" for. The lender will provide a "pre-approval" certificte which is shared with the borrowers who can then use it to demonstrate their purchasing power.
Quite often real estate professionals will request a "pre-approval" certificate or ask if they have been "pre-approved".
Timewise it typically takes between 1-to-3 days.
Often used when shopping for a home, a pre-approval will yield more certainty of what a borrower can be approved for than other methods. All of the inputs used (as noted in points above) in the analysis need to be evidenced by documents (not just word-of-mouth) and the credit report of the borrowers will be pulled (not just word-of-mouth).
Rob puts those collected details together and coordinates with one of the lenders to determine what dollar amount the borrower can be "pre-approved" for. The lender will provide a "pre-approval" certificte which is shared with the borrowers who can then use it to demonstrate their purchasing power.
Quite often real estate professionals will request a "pre-approval" certificate or ask if they have been "pre-approved".
Timewise it typically takes between 1-to-3 days.
What Is A Pre-Qualification?
This invovles the same details as the pre-approval above, however, most of the details used for determining the "pre-qualification" provided verbally or written (not backed by documents).
The credit report of the borrower is often not pulled as well and the "pre-qualification" is just executed by the Mortgage Agent (no lender invovled). A "pre-qualification" certificate is provided and shared with the prospective borrower.
A "pre-qualification" can typically be put together the same day.
This invovles the same details as the pre-approval above, however, most of the details used for determining the "pre-qualification" provided verbally or written (not backed by documents).
The credit report of the borrower is often not pulled as well and the "pre-qualification" is just executed by the Mortgage Agent (no lender invovled). A "pre-qualification" certificate is provided and shared with the prospective borrower.
A "pre-qualification" can typically be put together the same day.
What Is An Affordability Estimate?
An affordability estimate is a rough calculation—often done through an online calculator or initial conversation—to help you understand a ballpark range of what you may be able to borrow. It does not commonly involve any credit checks or documentation review.
An affordability estimate is a rough calculation—often done through an online calculator or initial conversation—to help you understand a ballpark range of what you may be able to borrow. It does not commonly involve any credit checks or documentation review.
More details on the variables involved with the review...
Obligations of the borrower(s) commonly reviewed:
- Revolving credit such as credit cards and lines of credit.
- Personal loans which are commonly used for vehicles, equipment, education...etc.
- Leases for vehicles or other goods.
- Spousal and child support.
- Obligations associated with properties you already own:
- ->mortgage balance and payments
- ->secured lines of credit
- ->property tax
- ->heat
- ->condo fees
Income of the borrower(s) commonly reviewed:
- Employment Income
- Secondary Employment Income
- Child Care Benefit
- Spousal Support
- Child Support
- Rental/Boarder Income
- CPP
- OAS
- Work Pension
- Investment Income
Property (or potential property) you are looking to borrow against:
- Approximate value of it
- Property tax
- Monthly heating cost
- Condo/Maintenance fee's (if applicable)
Assets of the borrower commonly reviewed:
- Chequing and Savings accounts
- FHSA (First Time Home Savings Account)
- TFSA (Tax Free Savings Account)
- RRSP (Registered Retirement Savings Plan)
- RRIF (Registered Retirement Income Fund)
- Non-registered investment account
- Equity in a property you own
Credit rating and repayment history of the borrower(s):
- What is the credit score
- Any bankruptcy or collections?
- Late payments
- How much experience with credit
Interest rates available at that point in time:
- A review of current interest rates. The lower/higher the rate the more/less you can typically borrow.
