mortgage
Ghummaz Bhatti

Ghummaz Bhatti

Defining Mortgage Pre-Approval, Pre-Qualification and More

Finally making up your mind to get a home can be quite a loaded decision, especially since the home buying process can be rather complex. For a number of people exploring the housing market for the first time, it can be a completely foreign experience with a vocabulary that you may not totally grasp. 

One aspect of home buying that you should learn a little bit more about is the mortgage loans that you’re going to borrow. Taking out this lump sum of money will help you acquire a home that you can call your own.

There are a variety of terminologies within this borrowing stage that you need to know about, such as the mortgage pre-qualification, pre-approval, and more. Continue reading to learn more about what these terms mean to be more informed about the process.

Mortgage Pre-Qualification

Mortgage pre-qualification is the first thing you would have to obtain in the home-buying process. This is commonly confused with mortgage pre-approvals, but a pre-qualification is a quicker process that doesn’t take into account your credit rating.

Instead, consider it as a quick simulation of discussing the mortgage loan you’re going to take out. A mortgage agent can help you discuss and gain a better understanding of the current mortgage rates and options that you will face in the future. 

Mortgage Pre-Approval

A mortgage pre-approval is usually one of the lengthier periods of borrowing a loan, as it involves a more in-depth look at your financial situation and capabilities. Expect to have specific documentation required as proof of your identity, income and assets. It can take a couple of days as there is a verification process.

Once you are granted mortgage pre-approval in the future, it will usually remain as is for about  60 to 120 days. Be sure to clarify the terms with them to know how long you have to find a home. Extensions can be negotiated, but documentation may require a resubmission, though it will be subject to your financial situation’s stability.

Mortgage Rate Guarantee

A mortgage rate guarantee is what buyers may get during pre-approval, though they aren’t given by every service. Most homeowners may like this more, though, as there’s a period of protection from increased rates when the market shifts.

The protection’s length of time can depend on a mortgage agent’s disclosure and negotiation with you. This should typically be accompanied by a conditional commitment during the mortgage pre-approval so that you get a sense of the expected total loan amount.

Mortgage Rate Holds

A mortgage rate hold is similar to a rate guarantee that it locks in the mortgage rates, but this is specific to fixed mortgage loans, unlike variable ones that may fluctuate and depend on the market more. This can be beneficial if you seek to get constantly lower mortgage rates.

Keep in mind that acquiring a mortgage rate hold can be slightly different depending on who you’re dealing with. Some may aim to lock in a variety of different mortgage rates, while others will monitor the market to maximize your rate hold. Work with a reliable mortgage agent. 

Conclusion

By reading this guide, you should have a better understanding of what different aspects of the mortgage borrowing process will entail. Be sure to stay on your toes and keep up with the speed of the market so that you can get your dream home soon. 

Looking for mortgage services in Ottawa? Ottawa Mortgage Services offers mortgage agent services for first-time homebuyers, self-employed individuals and commercial clients. Get in touch with us now!

Contact Ottawa Mortgage Services to learn more

[email protected]

Like & Share on Instagram & Facebook

@ottawamortgageservices

Get Started, sign up and fill out the application: Click Here

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on email

Related Articles

mortgage

Are Mortgage Rates Going Up Or Down? Here’s How You Can Tell

If you have a mortgage, you are pretty concerned about interest rates! Mortgages grow more costly when interest rates rise. It becomes considerably simpler to keep up with a mortgage when interest rates fall. The issue is that you’re not only buying a mortgage based on today’s rate; your mortgage

Read More
Home buyers are checking into the contract.

3 Mortgage Tips for the Self-Employed Canadian Home Buyer

Getting a mortgage for your home may be as simple as providing a pay stub and a job letter as two forms of requirements. Sure, there are other prerequisites right after that, but the laundry list of requirements for the typical employee is usually accessible and easy to accomplish. However,

Read More
house

Home Equity Loan vs HELOC: Which Should You Choose?

Home is where your heart is, but according to a recent survey, it’s also the heart of your investment portfolio. It’s worth a lot of money and can be an asset that you strategically use to your advantage. To do so, you have to make sure that you take steps

Read More
Shopping Basket