There is a huge difference in Pre-qualification and Pre-approval. To get a pre-qualification (just as one of the big banks is offering in 60 seconds) only tells you the amount you could qualify for. It doesn’t know if you are qualified because no credit has been pulled, no income requirements reviewed and no down payment proof sent in. This is why it is so important to work alongside a broker who will take the time review and provide guidance on the pre-approval process. It is very important to have this in place when going and shopping the housing market to know what you qualify for.
The other important reason is if you were pre-approved with a rate hold in place and the mortgage rules change you are grandfathered with those old rules for a time period. For an example a family with a household income of $80,000 qualified for new mortgage of $361,800.00 prior to May 7th when the Bank of Canada changed the benchmark qualifying rate from 5.14% to 5.34% now that same family only qualifies for a mortgage of $354,800.00. This can make or break your chance to purchase the dream home you have your heart set on. If a rate hold had of been put on this preapproval you would still be able to get the home with a mortgage for $361,800.00.
So take the time today and contact your trusted Mortgage Planner to help walk you through the process.