Pre Qualified Vs. Pre Approval- Mortgage Rates

There have been a lot of talks lately surrounding raising interest rates and many clients have had questions and concerns about these increases and their rate holds. So I went to the source and spoke to a local mortgage professional with RBC Edith Loewen for some tips.

First of all, you need to know the difference between a rate quote and a rate commitment. A rate quote is provided to you by your mortgage professional based on a few questions about your financial and income situation combined with the current rates the financial institution is currently offering. A rate hold or commitment is a more in-depth look into your ability actually to make your monthly mortgage payments and requires proof of your financial standing. An official pre-approval will be made in writing. You should complete this process before starting shopping for homes.

Currently, another important factor is to move forward with getting pre-approved promptly. Interest rates have been creeping up a little bit at a time over several increases. A rate quote may not be honored a week later by the time you get around to your official pre-approval if another increase has occurred.

Lastly, once you are pre-approved for a set amount of time typically 90 days, you actually only have about 6 weeks to make an offer on a home. To get your guaranteed rate your deal needs to complete before the rate hold expires. This means you need to have subjects removed and be moving in before that rate expires.

I hope this information was helpful! Contact me for a referral to an outstanding mortgage professional at 778-784-7845!

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