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Mortgage Preapproval FAQs


Can I use POA (power of attorney) to buy a house on behalf of someone else, such as my partner?

While POA is a legal document, mortgage lenders have their own policies and the use of POA to buy a house has become increasingly more challenging to protect homebuyers from fraud. If you believe POA will be needed due to a specific circumstance, talk to your mortgage professional in advance. The mortgage lender will need to approval the POA and often times require the specific address of the property to be included.


What type of communication options do you offer? What if my partner and I are located in different places?

I'm accustomed to accommodating various time zones and coordinating communication between couples located in different places, such as text, email, phone, video conferencing and digital signing. This makes the mortgage process much easier for today's busy lifestyles.


Does employment insurance income or Maternity leave benefits count on a mortgage application?

Employment insurance is not income we can use on a mortgage application, however maternity or paternity leave benefits with a return to work date can be included. Also be sure the rest of your income is able to be included on an application, as there can be certain types of non-guaranteed income that cannot be added.


When should I start the mortgage preapproval process?

As soon as you start thinking of buying a home is the right time to get in touch. You may have questions or want advice which could put your mind at ease.


Do I need a credit check and will it hurt my credit?

A credit check is necessary but for those with a healthy credit history a check will not impact the rating. What does impact your rating is applying for multiple new accounts in a short period of time or having poor repayment habits. Be sure to continue good credit practices to maintaining financial health.


Is there a fee to work with a Mortgage Broker?

For typical residential mortgages, there is no fee to the client to work with a mortgage broker. The lender pays the broker a 'finder's fee' and it's not added to your mortgage or your interest rate. For non-typical purchases there can be a fee that is discussed in advance.


What is the Stress Test?

It sounds scary, like you'll have to give a blood sample, run on a treadmill or write a test. It's not that scary and is something I do on the application versus you having to do anything. What it means is that you're qualifying at a higher interest rate than what you'll actually pay, to ensure you can afford the mortgage at a higher interest rate. This reduces your buying power and is a government regulation.


What is a Financing Clause?

A financing clause provides the buyer a window of time to secure financing. During this time your mortgage professional will finalize your application and provide you with an approval and mortgage documents to sign. The time is typically 5-10 business days to secure financing. Having a thorough preapproval done in advance will save you time during the financing timeframe.


Can I offer without the financing clause?

It's certainly an option and one that you may be tempted to do in a hot market, but I always recommend including the financing clause to protect yourself. The mortgage lender may choose not to lend on the property, so unless you have cash to buy the house you need the financing clause to allow yourself time for a mortgage approval.

There's tons of other great questions that I get on a regular basis, too many to list! If you have one that wasn't covered here, I'd love to hear from you!  

Sarah Nixon-Miller, Mortgage Broker