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Apr 21 2017

Pre-Qualification vs Pre-Approval

With the spring real estate market underway you hear a lot about how simple getting a pre-qualification or a pre-approval can be. You’ll be told you can go online, fill in a few fields and are given a magic number. While getting a pre-qualification is a quick and simple process, it won’t leave you feeling as confident as a pre-approval with a licenced professional would.

Clients are often confused about the difference between a pre-qualification and a pre-approval so let’s talk about the differences and why getting a pre-approval is more worth your while.

During a regular pre-qualification a representative will ask you for details about your income, debts and give you a general idea of how much you could afford. It is a very basic analysis and it does not take into account your credit report which plays a large factor in whether you are approved or not later down the road when you find a property you want to put an offer on.

Getting a pre-approval done with a licenced mortgage agent involves a few more factors, however provides you the best results and allows you to go into a bid for a property with confidence. Your licenced mortgage agent will require your recent paystubs, a current employment letter and will pull your credit report to evaluate your credit history and beacon score. You’ll remember from a previous article 680 and above is where you would like to be. Other important factors such as property tax estimates and the cost of heating will also be taken into account. After looking at all this information they can give you a pre-approved amount and also provide you a letter if you wish. Often time Real Estate Buyer Agents will not work with you unless you can confirm you have been pre-approved for a mortgage. By knowing your pre-approved amount you won’t waste time looking at properties you can’t afford and can focus on finding your ideal home within budget.

If you have any questions about the pre-approval process or would like to get started on yours please reach out anytime.

Ericka Kodituwakku is your trusted Mortgage Agent in Ottawa specializing in first time home buyers. Contact her today for a FREE Homebuyers Guide and with any questions on the mortgage process.

Ericka Kodituwakku, Mortgage Agent
Mortgage Alliance Licence # 10530

(613) 413-2781
www.mortgagealliance.com/ErickaKodituwakku
ekodituwakku@mortgagealliance.com
https://www.facebook.com/KodiMortgage/

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Written by Dwania Peele · Categorized: Ericka Kodituwakku · Tagged: loan, mortgage, pre-approval, pre-qualification, Real Estate

Mar 20 2017

Preparing for homeownership in 4 steps

It’s the end of the month and your rent has gone through like it has for many years. You’ve never had an issue paying your rent on time and perhaps you’ve thought about owning a home, but don’t know if you could afford it or don’t know where to start. Purchasing real estate can be a great long term investment putting you on a path to financial success and is attainable if the right steps are put in place.

When considering becoming a homeowner preparation is key and more so when it comes to getting approved for a mortgage. It is a process with several key factors to consider.

 

Here are 4 things you should be doing:

  • First, monitor your credit score. Banks and lenders use your credit score to determine the level of risk lending money to you will be. Having a higher credit score and clean credit history, ideally above 680, demonstrates you to be a good candidate.
  • Second, evaluate your income and employment situation. Your income level and debts will determine how much will be approved for. You also want to consider affordability. After paying your mortgage, monthly bills and other necessities is there any savings?
  • Third, saving a downpayment. At minimum you will need 5% of your purchase price to use as a down payment on an owner occupied property. Steadily saving for this in your bank account and having it ready a few months before making an offer will put you in a good position.
  • Fourth, seek expert advice. Speaking to a mortgage professional will put you on the right path to getting approved the first time. They will evaluate your individual situation and develop a plan with you towards becoming a home owner. Brokers work with several lenders including banks, credit unions, monoline and private lenders to make sure you are getting a good mortgage product at the best available rate.

The process does not need to be overwhelming and will be stress free if you work with a professional in the field who can answer all your questions and provide you with the information you need to make smart financial decisions.

 

Ericka Kodituwakku is a mortgage agent in Ottawa specializing in first time home buyers. Contact her today for a FREE Homebuyers Guide and with any questions on the mortgage process.

Ericka Kodituwakku, Mortgage Agent
Mortgage Alliance Licence # 10530

(613) 413-2781
www.mortgagealliance.com/ErickaKodituwakku
ekodituwakku@mortgagealliance.com
https://www.facebook.com/KodiMortgage/

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Written by Dwania Peele · Categorized: Ericka Kodituwakku · Tagged: credit score, credit union, downpayment, employment, Ericka, Ericka Kodituwakku, expert advice, homeowner, Investment, mortgage, mortgage professional, new home owners, paying rent, private lender, Real Estate

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