Toronto mortgage – Paul Meredith

As a mortgage broker Toronto, I am always looking out for my clients in the best possible way. Whether it’s refinancing, renewing or purchasing a home, a mortgage is a big deal.

If you’re serious about purchasing a home, there’s a good chance that you are going to get a pre-approval from a lender or broker.

After all, getting pre-approved for a loan can save you time and headache as opposed to not getting pre-approved. Additionally, having a pre-approval can also give you negotiating power with a potential seller as well as lock-in a mortgage rate for up to 120 days.

But things can turn around quickly if you’re not careful. By avoiding the things talked about on the following list, you can avoid future headaches with lenders. Here are 3 Things That Can Make Your Pre-Approval Useless:

1. Lack of paperwork

There are situations that exist where borrowers will be pre-approved with minimal or even no documents shown to the person offering a pre-approval.

When applying for a mortgage, an absolute must is the presentation of proper documentation that prove you can afford a mortgage. Lenders will require certain financial documents, such as bank statements, proof of income, tax returns and more. Additionally, a valid piece of identification is a good thing to have so you can prove you are who you say you are.

Failure to provide the required documents to a lender can severely impact your ability to secure a loan. In an ideal case where a document is missing, the process will simply be delayed. However, not bringing the required documents can lead to a straight-out mortgage decline.

2. You have a lot more debt now

Just because you obtained a pre-approval from a broker doesn’t mean you have the green light to start expanding your budget.

A pre-approval is based on your current financial situation and when it’s time for a lender to grant you a loan they are going to conduct another credit report. If you go and buy a car, go on an expensive vacation or max out a couple credit cards after your pre-approval, there is a chance that you will be denied a mortgage because of the increased debt you have now taken on.

If you’re wanting to go on that vacation you’ve always dreamed of, or want to buy a fancy new car along with your new home, it’s best to wait until you’re officially approved for a mortgage to do so.

3. Lack of money to cover closing costs

With the number of costs that are associated with closing a purchase, it’s quite easy to end up paying more than you originally anticipated.

Costs such as potential lender fees, property valuation, home inspection, property survey, legal fees and land transfer taxes are just some that could boost the total cost of closing a home. Ensuring that you have cash set aside for closing costs specifically is a way to ensure you have the funds available to do so, because if you don’t, you could potentially get denied for a loan.

Conclusion

Avoiding these three things after you get pre-approved for a mortgage can help save you headaches down the road and reduce the risk of getting denied.

Being a Toronto mortgage broker, I can help make sure that you don’t run into these kinds of problems when applying for a loan.

For more information, contact me today!