Toronto, ON (PRWEB) June 21, 2013
When someone is going to buy their first home – they are filled with a lot of excitement, but may experience a lot of stress trying to find the appropriate mortgage for them. In order to alleviate some of this stress, it is best for potential home buyers to get pre-approved for a mortgage before trying to find a home says KANETIX.
To make this process easier for home buyers, it is a good idea to get a mortgage pre-approval first. It works a bit like a trial run. The lender gets a chance to evaluate the applicants, and the new potential borrowers not only get a chance to see what’s involved but also how much mortgage they qualify for, an idea of how much their payments will be and what is required to have their loan approved by the lender. In addition, the pre-approval works to increase the buyer’s credibility with real estate agents and home sellers as it shows them that the buyers have the ability to secure a mortgage once they bid on a property.
The pre-approval process is not just a meet and greet, however. Applicants will need to bring with them a portfolio of financial information to allow for an initial evaluation. For most lenders, an example of what’s required includes:
The type of mortgage desired
- How much down payment (minimum of 5% required)
- Personal information
- The borrowers’ list of assets and existing liabilities
- Employment history and income level
- Other income sources
- Employment history
- Credit history
For some mortgage applicants, the pre-approval process can be a bit of a wake-up call. It helps to identify any problem areas in an applicant’s financial history and give home buyers, for example, an idea of how much they need to save before they buy a house or by how much they need to improve their credit score in order to be approved for a mortgage. Additionally, a good idea, before applying for a pre-approval, is to obtain a copy of one’s credit report from one of the credit bureaus to have a better idea of where the applicant stands financially. Applicants can also use KANETIX Credit Score calculator to estimate their credit score.
During the pre-approval meeting, the loan officer will examine all the information provided by the applicant. The criteria lenders will look at in order to make a decision include, for example, the buyer’s liabilities, their overall credit history, and risk factors that might tell the lender the potential borrowers will not be able to afford their mortgage.
Once the pre-approval is issued by the lender, the applicant will then receive a pre-approval certificate or a written confirmation listing a specific, fixed interest rate. This rate is usually guaranteed for two to three months giving home buyers a chance to start shopping for a home. Having a guaranteed rate can be an important benefit if interest rates rise in the meantime. And if rates go down, home borrowers still have the chance to get a lower rate.
When home buyers go through a pre-approval process, they assume the biggest benefit is that they will be given a preliminary green light to borrow. In fact, the most important benefit comes with finding out the maximum home purchase price a prospective borrower can actually afford.
Obtaining a mortgage pre-approval has its advantages, both for the borrower and for the lenders. It allows both sides to see what will be required from the other in order to be approved for a home mortgage. The mortgage pre-approval helps buyers better prepare for home-buying.
Launched in October 1999, KANETIX was Canada's first online insurance marketplace and today provides over a million quotes per year to consumers looking for insurance, as well as comparisons for mortgage rates and credit cards.
The KANETIX mortgage rate comparison service is a one-stop shopping environment for consumers. Each day, thousands visit the KANETIX website at http://www.kanetix.ca to comparison shop their various financial needs. Shoppers choose what they want to compare, obtain a quotation and complete an online application or, with the help of KANETIX connect with the provider to purchase or apply for the product over the phone.
Through its Software as a Service team, KANETIX is also the leading provider of online insurance quotation technology, developing online quotation systems, mobile solutions, actuarial tools and websites for many of Canada's largest insurance brands.
For more information, visit KANETIX.ca or contact:
416.599.9779 ext. 343
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