How to Prequalify for a Mortgage

mortgageIf you’re trying to get a second mortgage like a home equity loan, you’re going to need the secrets to prequalifying for a mortgage. From working with the right Canada mortgage broker to gathering up all the appropriate documentation, you’re going to have a long road ahead of you. Here we’re going to go over everything you need to know to get to the next level. It’s important you work with a professional though – the last thing you want to do is prolong the process and miss out on great opportunities while interest rates are so low.

Get a Handle on Your Financial Situation

You have to know where you’re at with your budget, your credit history and where you’re going to be in the near future. It’s never easy figuring this part of the game out, but if you want to prequalify for a home equity loan you have to do it. How much can you really put towards your mortgage payment every month? Can you afford to lose any equity in your home right now?

Get Your Documentation Together

You’re going to need the following:

Proof of Income – You need to show that you have a regular income to get a home equity loan or second mortgage. This means showing bank statements, letters from your employers, having your tax returns ready, things like that.

Proof of Identity – You need to be able to prove that you are you. If your lender doesn’t have stringent identity protection, you’re going to want to find another one to deal with. You need to know that they’re not going to cut a check to anyone pretending to be you!

Proof of Ownership – You’ll need to show how much of your home you’ve paid off. If you’ve paid it off in full you can use the letter to show. If you’re still paying bring in your most recent mortgage statements for the last 6 months and if you’re applying with a different lender bring in a letter from your current lender.

Check Online to See if You’re Pre-Qualified

You’ll want to check online to see if you’re pre-approved with one of those mortgage calculators. You’ll be able to fill out your income, your debts, your costs, all that stuff so you can make sure that you’re making the most of your equity.

What’s the Difference between Pre-Qualified and Pre-Approval?

Being pre-qualified just means that you can get a quote over the phone. Pre-approval will require that you fill out paperwork just like you’re applying for a home equity loan or a second mortgage. If you just want a quote you’re going to want to get pre-qualified. If you want to get pre-approval you’ll lock in a certain rate for the next 1 to 3 months.

You’ll want to be very careful about the lenders, mortgage brokers, anyone you let into your circle of trust. This way you’ll be able to keep hold on your equity without having to worry about getting ripped off.

Contact us today and see what we can do for you.