Mortgage Pre Approval to Buy a Home

Getting pre approved for a mortgage is a great first step towards buying a home in 2024, whether it’s your first home or you’re looking to upgrade. Every mortgage preapproval is different, but share some similarities as we will review below. With Altrua Financial it just takes about 15 to 20 minutes to get pre-approved, our pre approvals last for months, if not years, and we work to ensure your best interest rate savings right up until your closing date.

The 4 Pillars of a Mortgage Pre Approval

These 4 areas of down payment, credit score, income and property type encapsulate almost every aspect of a mortgage pre-approval. There are endless differences and combinations between these categories that affect the mortgage approval. Generally, where all 4 are strong, the lowest mortgage rates apply. However, approvals are also possible in situations where there is strong down payment, but less provable income or credit.

The amount you can commit towards the purchase. The minimum is 5% for an owner occupied/ rental, and this increases for purchases over $500,000. Can be sourced from own savings, gifted funds or even borrowed. Lenders will require a 90 day history of thee funds or a gift letter if gifted.

Credit score demonstrates a historical ‘willingness to pay as agreed’. An important consideration given the size of the mortgage loan. Credit should be at least 2 years old with 1 credit card minimum. However, exceptions can be made in many cases. The score should be over 680 in most cases for best rates. Amounts owed and existing payments (ex. credit card, car and student loans…) are also taken into account when determining affordability.

Refers to how much income, how it is received, and from what source. For example, is there a base salary/ minimum weekly hours? Is bonus pay or commission income being used? Is it self employment or contract job income? Generally salaried/ base income does not require a 2 year average, but variable bonus/commission/ self employment income requires a 2 year income average for the best rates. There are exceptions, even with less than 20% down payment.

The property type, location and condition are taken into account. Is it a rental property, second home/ cottage, or owner occupied home? Is it located in the city, or in the countryside? Is the property in excellent condition or in need of minor updating? Or does the property show signs of structural issues, damage or incompleteness? The property is not known during a pre approval, but can be reviewed by Altrua once found and checked over before making a full offer.

The 4 Step Pre Approval Process

The process below is an overview of what most buyers will experience when purchasing a property. At Altrua Financial, we break down each step and follow quality control procedures that avoid hiccups/issues later in the process and allow for confidence in the transaction. This high standard of service can only be had with a conversation that focuses on your unique situation, often in as little as 10 – 20 minutes. Book your appointment today!

A conversation is had on the phone or online, where a ‘pre’ pre approval is completed, questions are answered, and best rates are quoted. From here a secure online application is submitted, an requested documents uploaded. The application and supporting documentation are thoroughly reviewed and checked over/ confirmed by 2 team members. Pre approval options are offered.

A mortgage rate can be reserved, but not locked in. This means if rates increase, you will not be affected by higher rates. However, if rates drop, so does your pre approval rate. Covering your risk, leaving you open for opportunity.

Work with a professional Realtor to find the right property. If you’re looking for the best Realtors, we are happy to recommend and refer you to one. This process can take months, or in some cases just a few days.

Once the right property is found, a follow up mortgage discussion is had, and the application and supporting documentation is submitted to a lender for full mortgage approval. Once the mortgage is fully approved, it is reviewed and discussed and then signed digitally. The final closing is facilitated by your lawyer, who registers the property to your name an transfers the combined down payment and mortgage funds to the seller’s lawyer.

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Mortgage Broker - Brent Richardson

Brent Richardson

Principal Mortgage Broker/ Owner, Certified Financial Planner (CFP), BA (Hons.)

  • 16 + years of industry experience with over 1800 mortgage transactions including 350+ first-time buyer mortgage approvals.
  • Specialized knowledge for the most advanced and specific applications.
  • Certified Financial Planning  (CFP) designation to establish unique relationships focused on mortgage freedom, and financial growth.
  • Best Rate Guarantee
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