If TD Canada Trust is right, first-time home buyers haven’t been preparing for mortgages like in the past.
TD’s annual First Time Homebuyers report found that only 76% of respondents said they got pre-approved for a mortgage before house shopping, down from 91% in 2010.
Depending on your qualifications and purchase timeframe, skipping the pre-approval step when buying can open you up to rate risk and disappointment.
That disappointment can occur if you’re unexpectedly declined for a mortgage after signing a purchase agreement.
Other findings in the report:
72% of first-timers said they spoke to a mortgage lender before shopping, down from 84% last year.
50% of respondents said they won’t compromise on price when buying a home
One third (33%) said they bought or plan to buy a home with a rental unit
71% of those said they will use the income generated from their rental unit to pay off their mortgage faster.
The TD survey was conducted online by Environics Research Group between April 29 and May 16. A total of 1,000 Canadians were polled who had either bought a home in the past 24 months or planned to buy one in the next 24 months.