Are you getting ready to start your property search?

To do so, you will need a mortgage pre-approval. Although it represents the maximum amount you could obtain, this pre-approval does not guarantee that you will receive a formal mortgage loan.

When a lender decides to grant you a pre-approval and calculates the actual amount you are eligible for, they measure a number of factors directly related to the documents you have provided. The more precise information you can provide, the better your chances of turning a pre-approval into an approval. At Planiprêt, we can also, like a lender, analyze your situation and provide you with a mortgage pre-approval.

In this article, we present the key factors that favor the approval of a mortgage loan.

This requirement is self-evident, as identity verification is an essential step in the pre-approval process. That said, identity theft is a major and increasingly recurrent problem. For this reason, your lender will require you to provide a government-issued ID. Typically, a driver's license or passport indicating your name, address, and date of birth will suffice.

To ensure that you will be able to make your monthly mortgage payments, your lender will want confirmation that you have stable employment. You will need to provide a letter from your employer specifying the nature of your position and the duration of your employment.

Are you self-employed? You will then need to provide your lender with your tax assessments for the past two years, along with additional information such as the nature of the business, balance sheets, activity results, and references, among others.

You will also need to provide tax statements or pay stubs to confirm that your income has been stable for at least two years. If you have experienced long periods of unemployment or if your situation has been marked by instability, your lender will likely be less inclined to grant you a mortgage loan.

If you are self-employed, they may require recent income statements as well as other proof demonstrating your ability to generate sufficient income. Salary from a second job, commissions, bonuses, or investment interest are other proofs that may be requested by your lender.

Assets include all possessions that have financial value and can be easily liquidated. Money in your savings or checking accounts, investments, properties, vehicles (cars, boats, etc.), and valuable items (jewelry, artwork, etc.) are considered assets.

Your lender will then ask for information on all your assets and their respective values to determine the total estimate. The lender must be reassured that in case of financial difficulties, you will have access to funds to continue your payments.

Your credit score plays a crucial role in the approval or denial of a mortgage loan. Based on your credit history, this information is found in your credit report.

If your credit score is insufficient (less than 650), obtaining a traditional mortgage loan will be difficult. It is also recommended to regularly check your credit report to ensure it does not contain inaccurate information.

If you seriously consider all the factors listed above before applying for a mortgage pre-approval, your chances of obtaining it will be greatly improved. Access to the coveted property could perhaps become a reality!