Get a pre-approval. The first step in purchasing a home should be to meet with us, your mortgage broker, and determine the feasibility of a purchase. Next, determine what you can afford and get a pre-approval or a “rate hold” to hold the current interest rate for 120 days and protect you from any market fluctuations.
What is the rate drop policy with respect to pre-approvals?
A good lender will pre-approve you at a certain rate for 120 days. If rates drop during that timeframe and you decide to close on your mortgage, you should qualify for the lower rate. If rates increase, you still have the benefit of the lower rate. This varies from lender to lender.
What factors can affect my approval?
While a lender may pre-approve you at a certain rate up to a certain purchase amount, you won’t know if you’re fully approved for a mortgage until you have a specific home in your sights. Lenders need to know the total cost of the home – property taxes, maintenance fees, condo fees and actual price, etc. – before agreeing to lend you the money. Changes in your situation – such as your credit score or employment status – can also affect your approval status.
Will I be notified if a better product or rate comes available at renewal?
Many lenders and banks renew existing clients at the posted rate, rather than the discounted rate. Our team will ensure that you’re notified of your mortgage’s upcoming renewal – and the best mortgage rates and products available – so that you have ample time to choose the mortgage best for you. We try to contact all clients 4 months prior to renewal to have plenty of time to shop for the best mortgage for you.
Is the mortgage portable? Can I port my mortgage?
If you’re planning on moving before your mortgage term is up, you want to make sure your mortgage is portable – meaning you can take it, along with your existing interest rate, to your new home without incurring any fees. You also want to make sure that you don’t have to pay additional CMHC/Genworth premiums if your down payment is under 20% of the total purchase price.