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Hi everyone, and welcome to another edition of Homebuyer's School. Today I'm
joined by Mujtaba Syed, a mobile
mortgage specialist with TD Canada Trust,
and today the question we're gonna answer is:
"When should I get pre-approved for a
for a mortgage?"
So Mo, take it away. Absolutely Karl.
The best time to get pre-approved for a mortgage is technically when you're
shopping around. You want to do it ideally before you're shopping around so you can
get an idea of exactly how much you can afford, what your monthly payments are,
what your monthly obligations are. You want to make sure that it's comfortable
for you, that it fits in your monthly budget that you've kind of set for
yourself. So definitely we want to be able to do that before the shopping part.
And so, how far in advance before buying - buying a home?
So technically it could be the day you decide to go shopping, the day prior,
there's no really set rule or time but ideally
we want it to be the first step. We want it
to be the first step is to get pre-approved
for a mortgage before you start shopping
around so you can have a better idea
right? You could factor in two different
areas in the city you might want to be able to move to. Different styles of homes
that you're looking into, it could - it could change a lot of different things so
obviously we definitely, definitely want to be able to get pre-approved before we
even step into that market or speak to a real estate agent or anything of that sort.
Alright, so when you are, let's say, pre-
approved, how long does that last?
Does that actually expire?
You know, that's a great question.
So a pre-approval lasts for three months
and after three months it expires but if
you're ready, if you're, if you feel like
three months is not a long enough time
period for you, we can always, always just
re-approve you as long as situation hasn't changed for you financially, we could
keep their approval going as long as possible. Some things might change in
that time. Rates might change, they might go up, they might go down. The other
reason why I think a pre-approval is such a great thing to do is because if rates are
good right now, it locks in that rate for you,
even though the pre-approval is for
three months, we can hold a rate for you
for four months. So in a, in a very
competitive interest rate market, we want to get a pre-approval just to maybe hold
that rate, even though you might be two months away, you might be a month away
from finding a house. We want to be able to get that interest rate locked in for
you so you can actually benefit from it. But what happens if, after those three or
four months, that things change. Maybe not for you but, but just situation has
changed, you can't really like..the next step would be, let's say, the rate you're
just locked into another rate right in after the next three months, is that correct?
Yeah so the way it works is that if situations have changed for you even
on a personal level, we will reassess it once again, like I said. Our pre-approval
is important because we look at everything, we look at your situation, we
look at the market situation, we look at the interest rate situation and let's
say from the first time you got pre-approved to the second time, things
have changed, we will reassess at that time. And once again, talk about what
works best for you you might change your amounts, you might get pre-approved for
more, you get might get pre-approved for less, but that's - that's a very important
discussion to have during that process. But it's nothing to worry about. It's
nothing - if you get pre-approved, we don't want you to rush and find a house within
those three months our pre-approval can always be extended. Your situation might
have changed but we can always change the situation to kind of meet your needs
and have a little bit more of like a real discussion with you. So never feel
rushed that you need to buy it because you feel like your pre-approval is expiring.
And how many times can I get pre-approved?
As many times as you want. Exactly until
you're ready to purchase right?
Like once again, we want this to be a very enjoyable experience, we want - we
want you to be able to find your perfect dream home and sometimes it takes a
little bit longer to get that dream home.
We don't want you to feel rushed, we
don't want you to feel that you were
forced into a situation or something. It
is going to be your ideal home.
It's gonna be the one of the biggest purchases in your life that you do - one of
the biggest investments you're going to get into, we definitely want to make sure
you find the absolute best for yourself. Does um - does the amount of times that
you get pre-approved does that affect
your credit score?
It would, just depends on how the bank is
doing it. So, sometimes when you get
pre-approved for a mortgage, some banks
might do a soft credit check, just means
that they're just doing an inquiry. Some
banks might do a hard inquiry which just
means that they're actually applying for a
mortgage. So in each situation if you're
applying, it could affect how many times
you're applying with different banks but
ideally if you're with the same bank you
shouldn't affect you score that much.
Every time a lender or a bank looks at your credit bureau, they actually hold it
for 90 days and after the 90 days, they might need to do another one or they
might choose to keep the same one. It really just depends on situation to
situation and lender to lender. Perfect, do you have anything else to add?
No I think that's pretty much it. Like I said a pre-approval is very important
and like I said, just get out there, get pre-approved and feel confident in
knowing how much you're pre-approved for. Well thank you very much Mo, thank you
very much everyone for joining us and we'll catch you next time.
That's another edition of Homebuyer's
School. Tune in next time for more expert
tips and tricks and visit
www.homebuyersschool.ca to bring you
one step closer to finding your dream
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