Mortgage Pre-Approval Rate Hold with the Canadian Mortgage App
Are you seriously considering buying a home? Then you’ll want to get a mortgage pre-approval rate hold. In this article, we’ll look at a mortgage pre-approval and how a rate hold can help you in your home search.
What is a Mortgage Pre-Approval?
Are you looking to buy a home? Then you’ll want to make sure you get pre-approval before you start shopping. A mortgage pre-approval lets you know how much you can afford to spend on a home. It looks at your essential details, including your income, down payment, credit, debts and the property you’d like to buy.
Your income looks at how much you make, whether you’re salaried or hourly, full-time or part-time, and permanent or contract. All these together significantly impact how much mortgage funds you qualify to borrow.
In terms of your down payment, your down payment determines your maximum purchase price. You must have the minimum down payment to qualify to purchase a property. With an owner-occupied property, you can buy it with as little as 5% down. Whereas with a rental property, you need at least 20% down.
With your credit, you need to meet the lender’s minimum credit requirements to qualify for the mortgage in the first place. If you can’t meet those requirements, you’ll need to look into other financing options and perhaps put more down on the property.
When it comes to debts, any debts that you have or anyone else you’re buying the property with must be factored into your mortgage pre-approval numbers. The mortgage debt ratios allow you to have some debt. However, any excess debt will reduce your maximum home purchase price.
Finally, are the details of the property you’d like to buy. This includes the estimated annual property taxes, monthly maintenance fees and an amount for heat.
All these factors together will determine how much you’re pre-approved to spend on a property.
What is a Mortgage Pre-Approval Rate Hold?
While a mortgage pre-approval is helpful on its own, if you’re serious about buying a home, you’ll want to get a mortgage pre-approval rate hold.
A mortgage pre-approval rate hold can help protect you if mortgage rates start to rise before you can buy a home. Typically, you can secure a mortgage pre-approval rate hold for between 90 and 120 days.
How a rate hold works are that if mortgage rates go higher while you are searching for a home, you get the lower rate hold rate. It’s as simple as that. As long as your property closes before the rate hold expires, you have that added security from rising rates.
How the Canadian Mortgage App Can Help
Using the Canadian Mortgage App’s purchase calculator, you can see how much you might be pre-qualified to spend on a property.
Not only that, you can use the Compare Side by Side feature to see how much interest you might be saving by locking in a rate hold today versus signing up for a potentially higher rates in the future. Here’s a training video from Ben where he goes over the Compare Side by Side feature in the Canadian Mortgage App.
What are you waiting for? Download the Canadian Mortgage App today to try it out.
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