Why get a mortgage pre-approval in Cambridge?

Getting a mortgage pre-approval in Cambridge means you have a conditional approval that a mortgage professional arranges for you after reviewing your financial situation.

It’s a good idea to get a pre-approved mortgage before you start shopping in Cambridge. Many realtors will ask if you’ve been approved. A lender will look at your finances and figure the amount of mortgage you can afford. Then the lender will give you a written confirmation, or certificate, for a fixed interest rate. This confirmation will be good for a specific period of time. A pre-approved mortgage is not a guarantee of being approved for the mortgage loan. Even if you haven’t found the home you want to buy, having a pre-approved mortgage amount will help keep a good price range in mind.

Lenders require proof of:

1. Down Payment – how much money will you put down on the purchase of your home or condominium.

2. Income – what your monthly income is. If it’s hourly/salary/guaranteed.

3. Credit – your credit history shows your ability to repay debt.


Why get a mortgage pre-approval in Cambridge before you start to look?

1. Save you time and reduce uncertainty as you will be able to let your realtor know what price range you can afford.

2. Provide you with a written confirmation or pre-approval certificate of how much you are eligible to borrow.

3. Give you the edge and confidence when you are putting offers on homes in areas where buyers are actively competing for properties on the market.

4. Assure you of a particular mortgage rate — for a specific period of time (e.g. 90-120 days). A “locked-in” rate means there is no risk of an interest rate increase while you are house hunting. A mortgage professional may be able to obtain a longer pre-approval rate hold (e.g. 120 days). Plus, if the rates drop, your rate changes to the new rate.


What information do you need for a mortgage pre-approval in Cambridge?

For a mortgage pre-approval the following information is required of the applicant (and co-applicant)

1. Full legal name(s).

2. All sources of income(s) (e.g. pay stub or a copy of a T4 slip), letter from employer stating how long you’ve worked for your company and your annual salary or wage, spousal support, etc.

3. Date(s) of birth.

4. Identify if you have financial assets, for example, bank account and investment statements.

5. Summary information on assets (cash, investments) and liabilities (loans, credit cards, any other payments, including alimony and child support). Current monthly expenses and debt payments, which includes the monthly portion of any annual expenses.

6. History of residence and employment (3 years).

7. If on commission sales: 3 years personal tax returns plus Notice of Assessments from Revenue Canada.

8. If self employed: same as commission sales. Plus you’ll need 3 years business financial statements, and 3 years business tax returns (if applicable).

9. Condo/maintenance fees (if applicable).

10. Down payment information is submitted to the lender, which they use to make a preliminary decision of qualification. This allows the mortgage professional to obtain the pertinent credit file(s).


What will affect your mortgage pre-approval in Cambridge?

1. Changing employment or doing anything that will reduce or affect your income. Examples include if you are in a probationary period at work or if you are currently on, or plan to be on, maternity or parental leave.

2. Applying for new credit cards or loans.

3. Entering into a “don’t pay for a year” agreement.

4. Guaranteeing or co-signing a loan or mortgage for someone else.

5. Using any of your down payment money for other purposes.

6. Allowing your investments to slip below the amount you’ll need to maintain your current financial position