Although not mandatory, mortgage pre-approval is highly recommended when purchasing a property, especially for first-time buyers. It offers several benefits that can save time and money. Here are the top five.

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1. KNOWLEDGE OF YOUR BORROWING CAPACITY

A mortgage pre-authorization is a certificate made by a lender in which it indicates the maximum amount that it agrees, under certain conditions, to lend you for the purchase of your home. It therefore allows you to know your borrowing capacity from the start.

2. PLANNING MONTHLY PAYMENTS

By knowing your borrowing capacity, you will be able to establish the monthly payments required to repay the loan, based on the down payment you plan to make. If the payments seem too high, you can decide whether you want to reduce the purchase price or increase your down payment.

3. SIMPLIFIED PROPERTY SEARCH

Having a good understanding of your borrowing capacity and the monthly payments you will have to make will greatly simplify the search for properties with your broker. You will save time by avoiding visiting properties that are too expensive and you will be able to focus your efforts on those that fit within your financial means.

4. MORE CREDIBILITY AS A BUYER

With a mortgage pre-authorization in hand, you indicate to the various stakeholders that you are a serious buyer and that your financial situation is solid. Such a status could give you additional negotiating power during a promise to purchase and, in the event of multiple offers on the same property, give you an advantage over other buyers who have not been pre-authorized.

5. INTEREST RATE PROTECTION

By getting a mortgage pre-approval, you also get the assurance of a mortgage rate and, depending on the lender, this rate is guaranteed for a period of up to several months. This is very advantageous if the economic context is favorable to an increase in rates.

Mortgage pre-approval is free and there is no obligation. So why not take advantage of it?

SOURCE: https://www.centris.ca/fr/blogue/finances/5-avants-qu-offre-la-preauthorization-hypothecaire