A loan pre-approval basically is a confirmation from a lender that you have the capacity to borrow a particular amount of money. To get pre-approval, you may need to submit documents showing proof of income, proof of deposit, monthly expense and credit statements etc.
The majority of banks and lending institutions will offer pre-approval without any charge and it will remain in place for 3 months (duration can vary from lender to lender). Your mortgage broker can help in getting you a pre-approval by presenting the best loans and lenders for your situation.
The amount will depend on various criteria including your financial situation and lender’s conditions. You should discuss with your mortgage broker to get an idea of how much you can borrow depending on your income, goals and existing financial burden. Check out the How Much Can I Borrow Calculator for a more precise figure.
Lenders consider your income, credit history and monthly expenses before they decide how much they can pre-approve. Your mortgage broker should be able to offer suggestions as to your options. Book a FREE Consultation
The pre-approval is usually a certificate or letter declaring your loan amount has been approved and will be in place till a certain date. This document can be shown to real estate agents or sellers as prrof that your lender is willing to loan you the specified amount. This can also prove an effective bragaining chip during negotiations.