It makes a lot of sense!
Once you apply for a pre-approved mortgage, you'll know how much you can reasonably borrow to buy a home. It tells you what your payments will be, and it defines a realistic price range for your financial situation.
- With a pre-approved mortgage, you can lock in at today's rates.
- If rates go down before you complete the purchase, you will automatically get the lower rate for the term you selected.
This protection could save you a substantial amount of money if interest rates fluctuate while you're house shopping. With a pre-approved mortgage, you're much better prepared to shop for a home:
- You'll have a clear idea of what you can afford in terms of price, down payment, legal fees and other expenses
- You'll be able to make an offer when you find a perfect home.
Because you have all the financial facts in hand, your purchase commitment is far more likely to be one you can live with comfortably.
After the bank receives your final offer to purchase, your mortgage can be quickly processed, subject to satisfactory property appraisal .A pre-approved mortgage puts you under no obligation and is available to you at no cost.
Fixed rate or variable rate
When you take out a fixed-rate mortgage, your interest rate will not change throughout the entire term of your mortgage. As a result, you'll always know exactly how much your payments will be and how much of your mortgage will be paid off at the end of your term.
With a variable-rate mortgage, your rate will be set in relation to Prime at the beginning of each month. In other words, it may vary from month to month. Historically, variable-rate mortgages have tended to cost less than fixed-rate mortgages when interest rates are fairly stable.
When rates change, your payment amount remains the same. However, the amount that is applied toward interest and principal will change. If interest rates drop, more of your mortgage payment is applied to the principal balance owing. This can help you pay off your mortgage faster