While these two terms may sound similar, knowing the difference between pre-qualified and pre-approved mortgages in Toronto is key to getting you ahead of the home-purchasing competition.
While the terms “pre-approved” and “pre-qualified” are sometimes used interchangeably, there is a clear distinction between them. The difference comes down to who initiates the process.
In our last article, we examined the basics of what both terms mean. Now, we’re going to go over more in-depth information about pre-qualified and pre-approved mortgages.
Is it better to have a pre-approved or pre-qualified mortgage in Toronto?
Both pre-qualified and pre-approved mortgages provide borrowers with an estimation of the home they can afford. However, a pre-approval is a far more official step requiring the lender to verify their financial information and credit history legally.
If you want to get a pre-approved mortgage, you need to include pay stubs, tax returns, and even your social security card. Otherwise, you have minimal chances of getting a pre-approved mortgage in Toronto.
At the end of the day, it’s not a matter of which one of the two is better because they both have their purpose based on your needs.
Rather than considering which one is superior, view each of them as tools to help you compare your credit options and have a better chance at landing your dream home.
The Importance of Getting Approved for a Mortgage
Getting approval for your mortgage means that a lender has officially and legally reviewed your financial situation and confirmed your ability to take on mortgage payments.
When you get approved for a mortgage, your lender estimates how much you can afford to borrow, your interest rates, and how much your mortgage payments will be. Once you get officially approved, you and your real estate agent can use that information to focus on just the houses you can afford.
Also, a mortgage approval proves to the seller that you can afford the home they’re selling. If you don’t secure approval from the lender first, the seller might not trust you and consider your offer non-genuine.
All this, in turn, slows down the entire process, extending your mortgage loan application process for several additional months.
So, if you want to make the whole process as hassle-free as possible, your best bet is to get pre-qualified and, especially, pre-approved first before you even start looking into mortgages in Toronto.
Why choose us for your pre-qualification and pre-approval process?
Northwood Mortgage has been in the business for more than 30 years. With our team of over 135 professionals, we’ll ensure that your pre-qualification and pre-approval mortgage process is as hassle-free as possible in Toronto.
We’re one of the GTA’s larger brokerage firms, and with our professional and experienced staff, we always strive for complete customer satisfaction.
At Northwood Mortgage, we know how much of a headache it can be to go through the whole mortgage process. That’s why we’ll take care of all your mortgage problems while you choose your dream home.
The difference between pre-qualified and pre-approved mortgages in Toronto can be confusing, especially if you’re not an expert in the industry. Therefore, one of your best bets is to work with mortgage professionals who have helped hundreds of families get the house of their dreams.