WHAT IS A PRE-APPROVAL?

A mortgage pre-approval is when your lender has reviewed your basic financial information (income, credit score, current debts, etc.) and has determined the maximum amount of money they will lend to you.

 

PRE-APPROVAL PROCESS

The pre-approval process consists of three quick and easy steps.

• Once this is done, your file will be sent for a pre-approval to the lenders that offer the best rate and product to suit your needs.

• Our policy is not to send in a preapproval until rates start to move up, ensuring that you get the longest rate hold period possible.

• To determine how much you qualify for banks use a set of ratios that determine how much of your income will be used to pay down your current debt.

• The two ratios used are Gross Debt Servicing (GDS) and Total Debt Servicing (TDS).

 

GDS is the percentage of your gross income that is required to cover housing costs.

These costs include the following items:

1. Mortgage payment

2. Property tax payment

3. Heating expenses

4. Strata fees (if applicable)

 

TDS is the percentage of your gross income that is required to cover housing costs plus any debt you have.

These costs include the following items:

1. Mortgage payment

2. Property tax payment

3. Heating expenses

4. Strata fees (if applicable)

5. All debt