Mortgage/Finance Info


This is the first step in obtaining a mortgage. Pre-qualification is the lender’s estimate of your ability to borrow. Your ability to buy depends on your access to money and ability to borrow. In the pre-qualification process the lender will review your mortgage application and usually request a credit report. After analyzing your credit history, income and debts the maximum loan amount for which you would qualify will be confirmed.


The difference between pre-qualification and pre-approval often gets blurred. Pre-approval happens quickly after pre-qualification and provides an estimate of a buyer’s borrowing power and leads to provision of some type of commitment or offer to place mortgage from a lender mortgage broker.

You can afford a house that costs as much as the mortgage amount for which you qualify added to your total down payment. You should try and get pre-approved for the highest amount you would qualify for but make sure you do not go outside your comfort zone as you don’t want to be spending more than what you’re comfortable with.

Mortgage Broker vs. Bank

You shouldn’t be afraid to compare different lenders. Finding out what your bank can do for you is always a good idea. Interviewing a mortgage broker is also an excellent idea because they have access to many lenders and can obtain quotes from the various lenders who are best positioned to meet your needs. Mortgage Brokers understand what qualifications each lender is looking for and you can structure your application accordingly. They also know where the bargains are. Mortgage Brokers are usually compensated by the lenders.

Credit Report

When you apply for a mortgage lenders will ask permission to examine a detailed report of your credit history.  The information in the report will form their decision on whether or not to lend you money and how much. Credit reports precisely describe existing credit card limits, timeliness of payments, types of accounts, loans, balances, judgements, and bankruptcies and easily identify and misrepresentations made on your mortgage application. You should request a copy of your own report so that you can confirm its accuracy before you formally apply for a mortgage. You may challenge any errors and attempt to rectify wrong information before it works to your mortgage approval disadvantage.

Closing Costs and Down Payment

You will need to have some cash set aside for closing costs incurred through the purchase of your new home. It can be difficult to determine how much these costs will amount to but you need to be prepared. You will also need to have a down payment available to invest into your home. If you already own a home and are planning on selling it, you will need to determine how much equity you have in your home so that this can be added to the down payment.

More on Closing Costs here! 

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