The Do's and Don'ts of Mortgage Preapprovals

By: Marlene Boyle

The Do's and Don'ts of Mortgage Preapprovals

Tags: mortgage preapproval, durham region real estate, first time home buyer, clarington real estate

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The very first step if you're interested in purchasing a home is to get a mortgage preapproval. Yes, even before you contact a realtor or start browsing houses. A mortgage preapproval will allow you to know how much you can afford. Shop around for the best rates, do your research, and consider using a mortgage broker who can negotiate on your behalf.

Figure out what you can afford monthly, not just in terms of your mortgage, but all the costs associated with owning a home. Your mortgage preapproval could be for more than you can really afford, tempting you to buy a more expensive home.

Check with your mortgage broker to ensure you have everything you need. You typically need ID, bank account/investment statements, proof of assets (ex. car, boat, etc), proof of income, info about your debt.

Once you get preapproved, make sure you read the fine print. If you happen to have an accountant or family lawyer, it might be a good idea to request that they look it over too.

Make sure you avoid big purchases during the preapproval and home buying process. A change in financial situation can result in loan rejection even if you've already been preapproved.

Avoid applying for new credit, such as a personal loan or a credit card. Don't cosign for a loan either. Your debt and credit are factors in your mortgage approval.