Winter might not be the season that springs to mind when it comes to mortgages, but it offers a unique opportunity for Canadians thinking of buying a home.
The real estate market typically enters a seasonal slowdown after the fall bustle (which this year was sparked by the recent Bank of Canada interest rate drops).
Once the holiday hoopla settles down, savvy homebuyers can take advantage of the ‘cold weather’ lull and quieter housing markets to get a mortgage pre-approval. It’s a simple step that can set you up for success and put you one step ahead of the spring-time competition.
What is a mortgage pre-approval, and why does it matter?
A mortgage pre-approval is your financial starting line. It’s when a lender reviews your credit, income, and debts to determine how much you can borrow to buy a home — ideally, with the help of an experienced mortgage broker to ensure you get the best lender fit.
Think of a pre-approval as your ‘budget guru.’ It’ll guide you to a clear idea of how much ‘home’ you can afford, helping you narrow your search and pounce on the right home listing when it appears.
Pre-approvals also give you a competitive edge — realtors and sellers are more likely to take you seriously. Even better, most pre-approvals lock in your mortgage rate for up to 120 days, shielding you from potential rate increases while you home browse.
That rate hold can translate to significant savings in a volatile economy (like Canada’s, currently).
Why winter can be a perfect time for a pre-approval
Market ‘quiet time.’ Winter is traditionally slower for real estate activity. Fewer buyers are searching for homes, and brokers and lenders tend to have more time to dedicate to individual clients without the pressure of a busier spring buying season.
Regroup after holiday spending. As a calmer new year begins, it’s an excellent time to assess if the holidays set your financial goals back a bit.
Undergoing a simple pre-approval process with an unbiased, expert mortgage broker puts great advice in your corner, helping you nail down your budget goals — and how much extra debt to pay down before shopping for a home.
Anticipating rate changes. Interest rates are (finally) falling after 2 years of reaching for the clouds. A pre-approval helps you plan based on today's rates and navigate the federal stress test. But a broker can also outline how potential rate cuts could enhance your home affordability and ease mortgage payments.
If rates decline ahead of signing on the dotted line, you may decide not to use the extra home-price room, instead giving yourself more budget room.
How to get pre-approved this winter
Step 1: Review your finances
Take stock of your credit score, income, debts, and down payment source and amount to get a clear picture of your situation and help make your pre-approval process more efficient.
Step 2: Work with a trusted, expert mortgage broker
An unbiased, salaried broker can quickly outline your home price range, source your lender options, and find the best rates and terms for your situation. They’ll also de-stress your process so you can focus on planning your next steps.
Step 3: Go home shopping
With your pre-approval in hand, you’ll feel more confident about placing a home purchase offer. Make sure to add financial conditions to allow time for your mortgage loan to be approved before the sale is finalized.
At this point, your mortgage broker will walk you through the details and necessary documents to fully qualify, such as proof of income and employment, current property details (if you already own one), and down payment details.
Break out the shovel, and your pre-approval advantage
By getting pre-approved this winter, you’ll position yourself to move quickly and confidently when the right home comes along — hopefully ahead of the Spring 2025 rush. You’ll also have the advantage of locked-in rates, ensuring you’re ready for whatever the market throws your way.
Consider the broker source for your pre-approval. For over 18 years, True North Mortgage has been one of Canada’s top-trusted mortgage brokerages. Their highly trained, salaried (non-commissioned) brokers have access to several lenders and thousands of products.
They’re equipped to guide you through a fast, simple pre-approval while offering discounted mortgage rates. Their unbiased expertise can save you time, money and stress, helping you focus on what matters — saving the most on your new home.
Snow time like the present? Give True North a shout for your fast mortgage pre-approval, lowest rates, and exceptional service. Contact Canada's No. 1 Mortgage Broker today.