Once you have received your pre-approval and you know exactly what you can afford to borrow you can actively go shopping for a home. You will have the comfort of knowing that your rate is guaranteed for the determined amount of time outlined in your pre-approval.
You can also advise your real-estate agent of the price range you can afford to shop in which will help streamline the process so you aren’t wasting time looking at houses that aren’t in your budget.
Keep in mind that most mortgage brokers will try to get you approved for the maximum amount you are eligible to be financed for but this isn’t an obligation to spend every penny you are approved for; rather it’s a gauge to help you know where the top of your price range is.
It’s also key to note that a pre-approval is NOT an approval!
A pre-approval gives you a an idea of what you might be able to qualify for based on the information provided but because the lender doesn’t have the full picture when they are approached about a pre-approval they reserve the right to back out of the pre-approval.
The home you elect to purchase may have defects like asbestos, mould or be a previous grow-operation. Keeping this in mind, make sure that you keep a financing clause of a minimum of 5 days in your initial offer until the lender has time to review the entire offer to purchase.
Once all the conditions have been satisfied your broker will inform you that it is ok to remove this condition from your offer and you can then consider removing any other outstanding conditions you may have like a home inspection condition.