The Power of Pre-Approval

Spring is the best time to buy. With inventory as low as ever, and the Bank of Canada holding its interest rate stable for the spring market, it’s going to be very competitive for buyers in Toronto this spring.

The best way to set yourself up for success and be market-ready is to know your budget. You don’t want to waste time looking for homes outside of your budget, and you want to get the most for your dollar. Knowing your budget means knowing what you want, and the most successful buyers act with confidence. One way to build confidence and prepare for success is to get pre-approved. According to the Wall Street Journal:

“If you plan to use a mortgage for your home purchase, pre-approval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”

Pre-approval is a key step in the home-buying process. Getting pre-approved from a lender means you will know exactly how much you’ll be able to spend. A lender will examine your finances to determine what you would be qualified to receive as a loan. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. Freddie Mac offers this word of advice:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”

Getting pre-approved means you can shop with confidence, knowing exactly what you can afford. It also means that you can act quickly when the perfect home appears on the market, as you’ll already be one step ahead for your offer. Sellers benefit from your pre-approval as well, because knowing that a buyer is serious makes a seller more likely to work with them. Having a pre-approval letter shows sellers that you are a serious, qualified buyer, whose offer should be strongly considered.

If you’re looking to buy this spring, and want to get serious about it, connect with a local real estate professional and trusted lender today, so they can help give you the tools to have the best shot at buying your dream home.