Is Mortgage Pre-approval Important?

Assessing your income, creditworthiness, and current debt load is a good way to understand how much overall debt you can take on. As a general guideline, 43% is the highest DTI ratio a borrower can have to qualify for a mortgage. Ideally, lenders prefer a debt to income ratio lower than 36% with no more than 28% of that debt going towards servicing a mortgage payment.

Mortgage pre-approval is a good idea across the board. Whether you are a first time buyer or a current homeowner and plan to sell. Debt load is always a factor unless you are coming into a purchase with no mortgage required, cash in hand.

Some people are more comfortable dealing with their bank, and the bank will have a mortgage specialist on staff to guide you through the process. Banks may also offer a lower interest rate to their clients.

If you’re having trouble getting a bank loan due to reasons such as self-employment, buying multiple investment properties, or being considered a high-risk borrower by financial institutions, mortgage brokers can be a great alternative to help you secure a loan.

Knowing the value of the mortgage you qualify for is key to house shopping. It will leave little room for disappointment. Beyond that, you should seek the right balance of location, condition of the home, and features it offers. Finding a home that fits your budget may not cover all your wants and needs, so you need to prioritize what is most important to you.

This is where collaborating closely with your real estate agent can be extremely advantageous. They are the experts and will help you find