If you’ve been considering whether or not to buy a new home in the near future, you’ve probably also considered getting a mortgage pre-approval too — and if you were to ask us for our seasoned advice, we’d strongly recommend that you do so.
While a mortgage pre-approval isn’t the exact same thing as receiving a firm mortgage from a bank or private mortgage lender, there are many benefits to being proactive and getting a mortgage pre-approval early on in your home hunting process.
To learn a little bit more about the benefits of getting a pre-approval early on in your home search, and why right now, in particular, is a very opportune time for you to get yours, read through our brief guide on why you should get a mortgage pre-approval as soon as possible.
Setting Realistic Expectations Early
If you’ve been saving up for a home for a while now, you’re most likely quite fixated on the dollar amount in your savings account. While your current savings account is always a good indicator of what you’ll be able to offer as a down payment, it doesn’t really reveal too much about what your total home buying budget will be.
Instead, the best way to learn about your total home buying budget and what you can afford to spend on a new home is to get a mortgage pre-approval. Whether you go through your personal banking institution or a private mortgage lender, they’ll examine things like your regular monthly income, down payment capabilities, employment history, credit score, and more to determine what your total mortgage amount will be.
Once you obtain your mortgage pre-approval, this will more accurately inform your total buying budget and you can set out on your new home search and filter through listings with much more confidence and clarity of mind.
If you’re still searching for your ideal new home, let us do the legwork for you. Flip through our covetable collection of featured listings, then specify your search criteria and get the listings that fit within your exact list of wants and needs sent directly to you by signing up for our tailored listings service.
The Current Market Conditions
At the time of writing, the current market conditions across most of Ontario heavily favour sellers. We’re currently experiencing what’s known as a Seller’s Market, where the number of buyers looking for homes in the market heavily outweighs the number of available active listings.
While this makes buying a home much more challenging (and generally expensive) for competing buyers, it doesn’t mean it’s impossible to buy a home. In fact, one of the best things you can do as a buyer in competitive markets like these is to be prepared to act quickly when opportunities arise.
That means getting all of your ducks in a row well in advance of bidding for a home or entering into negotiations for one so that you’re able to finalize a transaction or have a conditional offer accepted at the earliest convenience of home sellers.
In order to ensure you’re able to move as quickly as possible at this stage, you need to have (at the very least) your mortgage pre-approval on hand. If you attempt to make a bid for a home only for the sellers to find out the success of the transaction hinges on you being approved for a mortgage, they’re more than likely going to accept another bid before you can get your affairs in order.
The bottom line is, if you want to be taken seriously as a buyer, especially in today’s ultra-competitive Seller’s Market, you need to have your mortgage pre-approval ready for sellers to examine.
Looking for more detailed information on Seller’s Markets? If so, you’ll probably also want to know how best to navigate negotiations in the potential scenario of a multiple offer situation. Find everything you need to know before entering today’s competitive real estate market here:
Interest Rates Are Low
Also at the time of writing, mortgage interest rates across Ontario are at a relative low when compared to interest rates in recent years — particularly preceding the COVID-19 pandemic.
While the Bank of Canada has recently warned prospective homebuyers that mortgage interest rates will be increasing soon, it should still take interest rates a significant amount of time to return to where they were pre-pandemic.
That being said, interest rates aren’t going to plateau or decrease from their current standings anytime soon, and it’s only a matter of time until they being to climb again.
So, if you’re looking to buy a home in the near future and want to capitalize on the current mortgage interest rates, the clock is ticking. Now’s the time to lock in a mortgage pre-approval with a low interest rate before they start to climb this spring.
There are a lot of steps that go into buying a home, and they can often overwhelm buyers — even those with plenty of experience buying homes. To help make the entire process easier and less stressful for you, lean on us for help. Learn about our approach to helping you buy a home, then book a buyer’s consultation with us below.
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