Buying a home is one of the biggest purchases most Canadians will ever make.
When thinking about becoming a homeowner and entering into the mortgage process, it’s important to understand the various terms used by mortgage lenders, including two important terms: pre-qualification and pre-approval. Do you know the difference?
Many lenders will pre-qualify their customers, but that only gives you a general idea of the amount of the mortgage you could afford. When you get pre-approved, you'll get a clearer picture of the home you can afford and what you might pay each month.
All pre-approvals come with a rate guarantee – at TD, this rate is valid for 120 days – which means that your rate is protected even if rates increase while you're home hunting.
If rates do rise, TD will honour the interest rate quoted on your pre-approval. If interest rates go down during this time, you can ask to have your pre-approved interest rate adjusted to reflect the lower current rate and start your 120-day rate hold again.
Pre-approvals are free and there is no obligation to use the full pre-approved amount. If customers want to take a little longer to search for the perfect home or if the home shopping process takes longer than expected, they can easily reapply for a new 120-day pre-approval.
To learn more about mortgage pre-approvals or to do your own pre-approval online, visit TD Mortgage Pre-Approval.