'But the branch told me I was pre-approved?!' :(


One of the most frustrating things I hear about in the mortgage industry is learning about people who have been 'pre-approved' at their bank branch only to find out later they actually can't qualify for a mortgage when the time comes. 'What?! How can that happen?!' you might ask. I'll explain...


First, the bank branch (for some very odd reason) doesn't actually review an applicant's credit bureau when they're applying for a mortgage (again, this is odd and I can't imagine why). Instead, only their history as a client with that particular bank is reviewed. Now, even if the bank never cared to check a person's credit bureau before actually providing them a mortgage (which would be silly), an applicant buying a home with less than 20% down (which is most home buyers) also needs to be approved by one of the 3 mortgage default insurers (CMHC, Genworth or Canada Guaranty) who have many strict credit bureau requirements.

Again, why they do this, I do not know but, this is a big problem! It can create a lot of disappointment for someone who is lead to believe they can qualify to be a home owner and this problem wastes everyone's time who is involved, like their Realtor® or new home consultant.

If you want to avoid this problem, see a licensed Mortgage Broker (like myself). Among many other benefits, we fully review every applicant's Equifax credit bureau before issuing pre-approvals. Buying a home is a serious matter and it should be treated as such.

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