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5 mortgage FAQs answered by an expert (Janessa)

Ah mortgages, a topic near and dear to my heart. Being a relationship manager means that a big part of my job is helping people find the right mortgage. And when faced with such a big financial decision, I encourage my members to ask a lot of questions—the more the merrier, really.  Here are 5 questions I get asked (rightfully so) on a regular basis.

1. How much can I afford?

This answer depends on a few factors, but an appointment with a lender will clear this one up for you. You can also use online tools, like our mortgage calculator to get an idea of affordability. When considering the overall cost of a mortgage, keep in mind you want to factor in strata fees (if applicable), property taxes and water/electricity/gas into your monthly payment.

2. What should I do before I get pre-approved for a mortgage?

Budget, budget, budget. Oh, did I forget to mention, budget? And make it specific and realistic. Get out those bank and credit card statements and sort your expenses in categories that are right for your life such as, grocery store visits, meals out, gas and parking, coffee and liquor purchases, and so on. Review all your transactions from the last 3-6 months and calculate the average amount you spend in each category in a month. You can get started with our budget calculator.

3. How do I get pre-approved? What does that mean?

A mortgage pre-approval is a commitment from the lender and financial institution to lend you X amount of money for a mortgage. To determine what that amount is, the lender collects all your information (income, assets, liabilities, etc.) and looks closely at your credit bureau. Once the evaluation for pre-approval is complete, you will get a pre-approval letter. Although you’ve been pre-approved, your offer is still subject to financing. This is when you have X amount of days after the offer is accepted to make sure your financing (or mortgage application) is completed and fully satisfied with the lender and financial institution. You still need your lender still has to review the property to make sure it is satisfactory and that all the costs associated with that specific place still work within the numbers.

Keep in mind a pre-approval is generally only good for 90 days.

4. Is there a difference between pre-approval and pre-qualified?

Many lenders use these terms interchangeably so you should clarify what they mean when they state you are pre-approved/pre-qualified.

Check out question number 3 for more information on pre-approvals.

For pre-qualified, it’s generally when you provide the lender information about your financial picture; income, assets and debts. The lender will review the information and give you a general idea of what you could qualify for.

5. What is a good interest rate?

How do you know if you’re getting a good interest rate? The first thing to keep in mind is an interest rate is based on your credit history and score. If you have a strong score, you’ll receive better rates. If you have a lower credit score, unfortunately, you won’t get the best rates because of current or previous issues on your credit bureau.

Honestly though, finding the best mortgage is not just about getting the lowest rate. Some places might offer you a slightly lower rate, but will they care about your business once the papers are signed? Can you speak with someone when you have questions or need to make changes?

Having all your banking in one place makes things more convenient. You can deal with one expert who’ll help you with banking needs not just specific to your mortgage. It’s also easier to make a holistic financial plan and help prepare for the future when one expert deals with all your finances.

The relationship is just as important as the rate.

Janessa Berman

Janessa Berman

Relationship Manager

Janessa has been in the financial industry for almost 10 years and is registered with B.C. Securities Commission to sell mutual funds. When she is not at work she enjoys hiking, fishing, volleyball and spending time with her family. Follow Janessa on LinkedIn.

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