How to Secure a Preapproval Loan in Alberta: Step-by-Step Guide

A mortgage preapproval in Alberta makes it easier to buy a house within your budget and secure a loan from a financial institute. They’re fairly easy to get and are free. If you’re a new homebuyer, this step-by-step guide will help you secure a preapproval loan in Alberta.

Step 1: Contact Your Financial Institute

Before you start looking at homes, contact your financial institution to let them know your intentions and get information about what they will need from you in order to qualify for an approved mortgage in Alberta. Lenders typically want to know about your employment history, income, assets, debts, the type of property you’re planning to buy, and the amount of money saved for a down payment.

During this conversation, you can ask questions and book an appointment to meet in person. Some banks offer online preapproval forms, but if this is your first time buying a home, meeting the lender in person will help you gain a better understanding of the mortgage preapproval process.

Step 2: Gather Documentation

For your preapproval appointment, you will need recent pay stubs, proof of employment, taxation forms, financial records as well as bank and credit card statements. By gathering all the necessary forms beforehand, you will save yourself and your lender a lot of time.

Step 3: Credit Check

During your appointment, your financial advisor will ask you to sign a letter authorizing them to run a credit check. The higher the credit score, the better. A low credit score indicates that you are not reliable when it comes to paying your debts and can jeopardize your chances of getting an approved mortgage in Alberta and elsewhere in Canada.

If you’re not sure what your credit score is, you can check your credit score for free before your appointment.

Step 4: Conditional Commitment

If your application meets the lender’s guidelines, you will receive a conditional commitment from your lending institute. This commitment is usually sent electronically and indicates that your approval is subject to their list of conditions. Some conditions can include proof of income and employment if you haven’t already provided it, property details and value, debt load, and the amount of money you will provide as a down payment.

If you have all this information ready during your appointment, it will help speed up the closing of your mortgage preapproval in Alberta loan when you find the right home.

Step 5: Assess Your Finances and Budget

The mortgage preapproval process shows homebuyers how much the bank is willing to lend them for a house. This information is valuable because not only does it help you narrow your search to houses in your price range, but it also helps with your budget planning.

Once the bank has preapproved you for a mortgage it’s good to review your income and expenses and develop a budget that includes your mortgage payments, so you won’t be surprised or financially strapped after you buy a home.

Step 6: Pre-Closing the Mortgage

Once you find a home to purchase, your lender and lawyer will work together to prepare and register your mortgage preapproval in Alberta with the Land Titles Office to ensure the property title is transferred to you once the purchase of the home goes through.

During the pre-closing of a mortgage pre-approval process, you will need to meet with your lawyer to sign papers, provide the down payment and closing costs, satisfy all remaining conditions, and acquire home and fire insurance. This step takes between 7 to 10 days to complete.

Step 7: Closing

The big day finally comes when the land is transferred to you, the lender transfers the funds for the approved mortgage in Alberta to your lawyer’s trust account so they can forward the monies to the recipients. At this stage, the purchase is finalized, and you are given the keys, officially taking possession of your home. Closing a preapproved mortgage in Alberta normally happens by noon on the date of possession.