Have you ever wondered what the qualification level of your mortgage advisor is? Their knowledge of mortgages can only come from experience. For this reason, not all mortgage pre-approvals are created equally.
Why is this?
When applying for mortgage pre-approval, lenders use a formula to determine the mortgage amount you can qualify for. The variables that can affect this formula include a mortgage advisor overlooking a payment on your application, incorrectly confirming your income, or not knowing each lender’s policies.
A mortgage pre-approval can only take you so far. When you make an offer on a new home, your mortgage advisor sends your application and the supporting documents to a mortgage lender’s underwriter. The mortgage underwriter confirms that your application is presented correctly and re-verifies the documents you initially provided. If they notice any errors, this will affect your mortgage approval.
If you are putting less than a twenty percent down payment on a property, not only does your lender need to approve you, but it is mandatory in Canada that a default insurance company, such as Canada Mortgage Housing Corporation (CMHC), supports your mortgage application as well. Default insurance companies don’t pre-approve mortgage applications. It is imperative that mortgage advisors know the default insurance companies’ policies up front to avoid any mistakes.
Mortgage advisors need out-of-the-box thinking to strategize and develop solutions that work best for you. It is crucial to seek a second opinion when applying for a mortgage pre-approval if your mortgage advisor is inexperienced. One miscalculation can have you searching for a house that is out of your price range or miss the opportunity, for example, to pay off a loan so you can shop for your dream home in a higher price range.
Do you want to know what you can be pre-approved for? Or do you want a second opinion on your existing pre-approved mortgage to ensure that your mortgage will be there when you do find the right home?
If so, give Mike Brandsma with The Mortgage Centre a call today for a no-cost, no-obligation look at your finances.