Changes During a Mortgage Pre-approval

Changes During a Mortgage Pre-approval

Once you’ve applied for a mortgage pre-approval, don’t make any major changes or significant purchases without speaking to your mortgage broker first. Your mortgage pre-approval is based on your current job, credit, savings, and expenses. Changing any one of these factors could affect or even void a mortgage pre-approval.

Are you thinking of buying a new car? Or maybe some fancy furniture for your new home? Purchasing any big-ticket items could put your mortgage approval at risk. Any large expenditure can decrease your mortgage pre-approval amount or even result in a decline from the lender.

For every $200 extra, you are required to pay each month towards debt, your mortgage pre-approval can lower by approximately $35,000. When applying for a mortgage, a lender must follow the rules and regulations set out by the default mortgage insurers and the Bank of Canada. When applying for a new car loan, finance companies do not need to follow the same guidelines. It is much easier to finance a car with a mortgage payment. Rather than apply for a mortgage with a big car loan payment.

The same rule can apply to a new employer. Even if you get an offer with a significant pay increase, you still shouldn’t start a new job while home shopping. Try to put it off until after your mortgage is finalized. Lenders require a recent pay stub (from the past 30-90 days), to verify your income once you make an offer on a home. In some instances, lenders will do a verbal employment check, as a second form of income confirmation. Do not put your mortgage pre-approval at risk without talking to your mortgage broker before accepting any new job offers. Every scenario will be different for each client.

Speak with your mortgage broker before making any significant changes while shopping for a home. Chances are you will be advised to wait.

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