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That mortgage pre-approval letter isn't worth the paper it's printed on if you haven't checked the fine print
I spent 6 months shopping for a place in Hamilton and kept seeing people get excited about pre-approval numbers. Then I found out my own pre-approval had a clause that let the lender change the rate if my credit score shifted by even 5 points. Closed on a condo last month and the rate jumped 0.75% because of a $200 credit card balance that popped up. Why does nobody talk about how these letters are basically just suggestions?
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the_shane4d ago
Jumped into the mortgage process last year and learned this the hard way. My pre-approval letter literally had a footnote that said the rate could change if my debt-to-income ratio moved by more than 2%. Bought a couch on 0% financing for the new place and suddenly my rate jumped a full percent. Felt like I was reading a car warranty ad with all the asterisks. Honestly the whole thing is just a fancy way for the bank to tell you "maybe, depending on the weather and what we had for breakfast.
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patkelly4d ago
Funny you mention that... same thing happened to my buddy in Barrie. He got pre-approved and the bank went and did a hard pull again the week before closing without telling him. Meanwhile he'd been using his credit card like normal, never missed a payment, but some store card from years ago popped up and tanked his score. Realtor told him it happens all the time, just nobody talks about it.
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