What is Pre-Approval with Mortgage Lenders in Ontario?
By : Mits Kantaria
If you’re ready to buy your first home, you’ll need to start exploring your options for financing. A fixed or variable rate mortgage is a powerful financial tool to get you into the home that suits your needs.
You can get pre-approval with mortgage lenders in Ontario, allowing you to freely explore the market with all of the documentation for a mortgage already in place. Learn about pre-approval with a fixed or variable rate mortgage and see how it can help you.
What is a Mortgage Pre-Approval?
Pre-approval simply refers to the process of determining what you can afford to borrow for your home purchase. Mortgage lenders in Ontario offer pre-approval based on your income, your current finances, and your ability to repay.
Pre-approval can be offered directly by mortgage lenders in Ontario, or by mortgage brokers.
This process can offer you some protection and peace of mind. Getting pre-approval before talking to a realtor will give you a period of 90 to 120 days in which you can explore the market with a guarantee of a specific interest rate. Once you find the right home for you, the mortgage will be finalized and you can proceed to closing.
Pre-approval is often given for 5 Year Fixed mortgage rates in Ontario. However, there are cases where you could get pre-approval for a variable rate mortgage with an understanding that you will be approved for the purchase once you find a home that you love.
How Do You Get Started with Mortgage Pre-Approval?
Mortgage lenders in Ontario, including the big banks, offer pre-approval directly to the consumer market. However, it’s a better idea to get pre-approval through a broker. Choosing a mortgage broker means access to more mortgage lenders in Ontario, including those that don’t engage directly with the consumer market. You’ll be able to apply once with a single credit check, and your broker will then engage with the lending market on your behalf.
If you want pre-approval with a rate that’s better than the average mortgage rate in Ontario, a broker is your best choice.
Pre-approval usually takes just a few days and you’ll need to submit documentation like your identification, bank statement, employment information, and statements of your savings, debts, and assets.
What are the Advantages of Pre-Approval?
You’ll enjoy several advantages when getting pre-approval with a below-average mortgage rate in Ontario through a broker.
- Your broker will calculate affordability based on your down payment, credit score, income, and debt.
- You’ll be able to explore the housing market with a maximum offer in mind.
- You won’t have to engage with individual mortgage lenders.
- Sellers like working with pre-approved buyers because the closing process is faster.
If you want to show that you’re serious when negotiating on a home, pre-approval can help. Because pre-approval also means locking in an initial rate, you’ll also have better control of your finances immediately after closing.
With an experienced broker, you can get a rate below the average mortgage rate in Ontario, and the home buying process will be much simpler overall.
Should You Get Pre-Approval for a Variable Rate Mortgage?
A variable rate mortgage can change throughout the term. Depending on the market, the mortgage could become less or more affordable depending on how the financial markets perform. When interest rates are trending downwards, it’s often a good idea to seek pre-approval for a variable rate mortgage. However, if interest rates increase, then you’ll end up paying more than expected over the term.
A variable rate mortgage is risky but it can often pay off for buyers. The initial rate will usually be locked in when you get pre-approval, but it could then change several times each year once you are making repayments.
You can talk to a mortgage broker to learn about today’s market and find out if a variable mortgage is right for you.
A Broker Can Offer Pre-Approval Below the Average Mortgage Rate in Ontario
Brokers maintain strong working relationships with a variety of mortgage lenders. This means they have more access to the market and can find rates below the average mortgage rate in Ontario.
If you want the best deal, you should always work with a broker. Because you’ll only need to apply once, you’ll cut out the time and stress that some borrowers experience.
If the average mortgage rate in Ontario seems high to you today, talk to Mortgage Capital Investment to find the best possible mortgage. Your dream of homeownership and financial security is within reach. Talk to us and begin the pre-approval process and get access to the best mortgage lenders in Ontario.
Lowest Residential Mortgage Rates in Canada*
|Term||OUR RATE||Bank Rate|
|3 Year Fixed/ 25 yrs||3.79%||4.19%|
|3 Year Variable/ 25 yrs||2.10% Promo||2.86%|
|5 Year Fixed/ 25 yrs||3.94%||4.24%|
|5 Year Variable/ 25 yrs||2.20% Promo||2.75%|
|5 Year Fixed/ 30 yrs||4.49% Promo||4.99%|
|5 Year Variable/30y||2.70%||3.40%|
Updated: May 16, 2022
* Current promotion rates may provide an additional 0.05% discount or may be anytime discontinued at the Lender discretion . Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.
LOWEST REGULAR RATES IN CANADA* * Current promotion rates may provide an additional 0.10% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.