Thinking about buying a home? One of the most important steps in the process is getting pre-approved for a mortgage. It shows sellers you're serious, gives you a clear idea of what you can afford, and helps your home search stay focused and realistic.
Here’s a quick guide to help you understand how to get pre-approved:
Before applying, it's a good idea to check your credit score. Lenders use this to decide if you're eligible and what interest rate you'll get. A higher score usually means better rates. Most lenders will want a minimum score of 620, however there are some exceptions.
?? Tip: If your score is low, try paying down debt, making all of your payments early or at least on time and avoid applying for new credit of any kind.
In Ontario, you must have a minimum of 5% of the purchase price plus closing costs which range from 1.5% to 4% of the purchase price, depending on your situation.
To purchase a $500,000 home, you will need $25,000 for your downpayment plus between $7,500 and $20,000 for closing costs. Closing costs include land transfer tax, legal fees, and possibly property inspection or appraisal fees. Contact us here to find out exactly how much you will need to make your purchase.
*Notes:
Some first time buyers will qualify for up to a $4,000 credit on land transfer tax, for purchases over $368,000 - Learn more here
Some buyers can claim up to $10,000 for the purchase of a qualifying home in 2024 if they meet certain conditions - Learn more here
An important step some buyers neglect to do is talk to an experienced Realtor. We are experienced professionals with a wealth of information to share and guide you along the way. From helping you decide if there are suitable homes in your desired price range and location to providing insider tips, and connections to trusted professionals you will need, with no cost or obligation, there is nothing to lose and everything to gain! At the very least you will become educated in order to make better decisions for you and your family. Contact us today by text/phone 226-400-6458, email to RealEstate@Tysoski.com or complete the form here.
Lenders will need to verify your financial information. Be ready to provide:
Recent pay stubs (usually 2–3)
Letters of employment
Tax returns (past 2 years)
Bank statements (last 2–3 months)
Government-issued ID
Details of any income or debts
4. Choose a Lender or Mortgage BrokerDo not underestimate the power of being pre approved! You can apply directly with a bank, credit union, or work with a mortgage broker who can shop around for the best rates. Don’t be afraid to compare lenders before deciding. Learn more Here!
Fill out the lender’s application form. You’ll need to provide personal and financial details, including your income, employment, debts, and assets.
The lender will review your application and documents. They will not do a “hard” credit check, until they are certain your application meets their guidelines. If everything looks good, you’ll receive a pre-approval letter showing how much the lender is willing to loan you.
Once you’re pre-approved, you’ll know your price range and can confidently make offers on homes that fit your budget.
Getting pre-approved is a smart first step in the home-buying journey. It saves time, strengthens your offers, and helps you stay financially prepared. If you’re ready to take that step, reach out to us here and get your new home search started today!
