How to Get Pre-Approved for a Mortgage

By : europeanproperty

When you’re looking to buy a new house, it can be difficult to get excited about one until you know how much you can afford. Getting pre-approved for a mortgage can help you determine your budget so you don’t get your heart set on a house you can’t have. By consulting a mortgage broker Hamilton homebuyers can get pre-approved quickly so they can find the home of their dreams, or at least a home within their budget.

Gather Documents

Several  before you’re ready to buy a house, you should begin gathering the documents you’ll need to get pre-approved. This may seem early, but if there’s any problem with your credit or documents, you’ll have time to fix it before actually going through the pre-approval process. Pull your credit report to identify any issues that could prevent a pre-approval. Then, gather your employment documents for the past three years to establish income and your bank statements from all accounts, including investment accounts.

Find a Mortgage Broker

Before you ever contact your real estate agent, you should find a mortgage advisor and broker to get the pre-approval process going. This is because if your real estate agent discovers the perfect house for you and you aren’t pre-approved, you could lose the house to another buyer who is pre-approved. The lender actually holds more power in the home-buying process than anyone else, and more homes are successfully closed with a pre-approval than without one. Provide your documents and credit report to your mortgage broker, who will advise you if other documents are needed.

Know the Difference Between Pre-Approval and Pre-Qualification

Many people use the terms pre-approval and pre-qualification interchangeably, but they actually mean two very different things. The pre-qualification process does not check your finances or identify potential issues, so it’s not going to hold much weight when you submit an offer on a house. Pre-approval is essentially a lender’s offer to lend you money based on your financial circumstances. It’s a much more thorough process and puts you in a better position to win a bid on a house.

Get a Guaranteed Rate

When you get pre-approved for a mortgage, your approval will usually expire after a period of time, which is usually between 90 and 120 days. The lender will typically lock in your interest rate for that time as well, so that you know about what you’ll pay if you find a house before the approval expires. In the event that you do not find a house in that time, you’ll have to get another pre-approval letter or get the one you have extended. If you go through the same lender, you may not have to provide all your documentation again, but if you decide to use a different lender, you’ll likely need to start from scratch.

There is No Obligation on Either Side

Even with a pre-approval letter, your lender is not obligated to provide you the loan. The chances are high that they will, but if something comes up in your finances that they didn’t catch during the pre-approval process, they could withdraw their offer. Likewise, there is no obligation on your behalf to take a mortgage out from that lender just because they gave you a pre-approval.


You don’t have to get pre-approved by a lender to look at houses you may want to buy, but you also don’t want to be on the outside looking in if you find a house you really want. The pre-approval process is free, so you might as well take the time to get pre-approved so you can land the house you want.