Things to consider for a pre-mortgage approval

Things to consider for a pre-mortgage approval

As a first-time home buyer in Edmonton, getting approved for a mortgage could be one of the most stressful steps in your home buying process. This stress eases around the second time when you already know how to get your first mortgage approved. In case you weren’t already pre-approved, you will begin your process of mortgage approval after making an Offer to Purchase and after your offer has been accepted. In most cases, your Offer to Purchase is conditional. You will need to secure your mortgage approval before proceeding with your home purchase. Here are a few things that you need to take care of for your mortgage pre-approval.

Proof of income

Gone are the times when “no verification” or “no documentation” loans were a thing. Today, homeowners need to be prepared with their W-2 statements from the past two years, their recent pay stubs and their year to date income to show their proof of income. You may also need to provide details of any additional income like alimony, bonuses or even your recent tax returns at the pre-approval stage.

Proof of assets

Another thing that you may need is to provide bank statements and investment account statements to give proof that you already have the required money for the downpayment and closing cost with adequate cash reserves. While most loans require you to purchase private mortgage insurance (PMI), a mortgage insurance premium (MIP) or a funding fee, there may be slight flexibility in these requirements if you can put down 20% (or more).

Having a good credit score

If you have been living in Canada, you already must have been told by everyone to maintain a good credit score. Most Canadian lenders require homebuyers to achieve a FICO score of 620 or above to facilitate conventional loan approval. Most lenders offer the lowest interest rates for customers who have a credit score of 760 or above. You may be surprised to know that FHA loan guidelines allow approved borrowers with a score of 580 or above to pay even as little as 3.5% down. Conversely, homebuyers who have lower credit scores are required to pay larger down payment amounts. Lenders often assist the borrower with low credit score ways to improve their credit score for better mortgage rates.

Verification of your Employment

Your lender will typically also ask you for verification of your employment along with your pay stubs. Although rare, they are also likely to call up your employer to verify that you are still employed and will also check your salary. In the case of homebuyers who have recently changed their job, lenders sometimes contact your previous employer to make sure of your prior employment. Most Canadian lenders make sure to ascertain your stable employment before approving a loan. You may also need to furnish additional paperwork pertaining to your business and income if needed.

In addition to the above, there are many additional documents and proofs that your lender may request before pre-approving your loan. If you are concerned about your documentation or wish to get more information about pre-approved mortgages and how they work to talk to an expert from Collin Bruce, they will be happy to answer any questions or concerns you may have related to mortgages. Collin Bruce is currently helping several Canadians realize their dream of owning a home with their guidance and help.

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The Collin Bruce Mortgage Team is stepping up to continue K-97’s support of the Rock and Roll Society of Edmonton’s Centre for Arts and Music (CAM); aimed at mentoring a new generation of musicians, with a special focus on vulnerable youth in our community.

With a focus on youth at risk in our community, CAM reaches out to children who would otherwise have few opportunities to participate in the arts. Our goal is to reach them during critical after school hours through music. At CAM, children learn how to write songs, play instruments and perform together on stage. In the process, they earn self- esteem, respect for themselves and others, and much needed self-confidence.



“I had a rather complex mortgage process but the team at Collin Bruce was patient, extremely helpful and always professional. I couldn't recommend them more especially Robyn! Thank you so much CBMT!”

Trevor (Edmonton)