Let's talk pre-approvals!
There are many steps to take before purchasing a property, from saving for the deposit through to researching interest rates and choosing a neighbourhood.
A home loan pre-approval is highly recommended for those buying a home, and there is no better way to move forward with confidence.
What are the benefits of obtaining a Pre-Approval?
1. Understanding your budget
A home loan pre-approval from a lender gives buyers an idea of what they can borrow and therefore which properties they can realistically afford.
This can mean you can narrow down the available homes based on these figures and ensure you don’t spend more than you can afford.
2. Add strength to your offer
When putting an offer on a home where there are multiple offers in place, offers with finance in place via pre-approvals are seen as more favourable than others as they are seen are more likely to be successful and not fail during the subject to finance period.
3. Settle on your home quicker
Home loan applications can take some time to process. By being pre-approved, you can remove a lot of these time delays before you sign any contract, meaning you have more time to get formal approval and can potentially settle on your new home quicker.
4. Real estate agents take them seriously
The property market can be very competitive, and a pre-approval indicates to real estate agents that you are a serious contender when you find a property.
Real estate agents are cautious with potential buyers as they don’t want finance to fail and having to relist the property on the market, taking up valuable time and slowing the sale process. By having a pre-approval, you can increase your likelihood that they will take you seriously.
What Do I Need To Know About Loan Pre-Approval?
Now that you know the benefits of having your loan pre-approved, it’s also important to get as much information as you can regarding the limitations.
For one, some lenders might provide only pre-approval based on information submitted online through their software. This means that your loan has not actually been assessed by a credit officer. When you go to finalise your pre-approval, they can still turn down your home loan application because of something they found after they look through all of your supporting documents. By going to a lender that will assess a pre-approval correctly, this will save you the hassle of getting more items for the bank once you have found the property you like.
Another point you should be aware of is that home loan pre-approvals expire after a certain period, usually after 3 months. If you’re having a difficult time looking for a property to buy, then you may have to re-apply for the loan. During this process, the lender will likely review your financial situation to ensure that you can still afford the loan for which you have been pre-approved. Depending on what your current financial position is like, will depend on whether any changes are made to your approval. This may include changes to your employment or savings held.
Apply for a loan pre-approval today!
If you’re ready to start your search for a new home or investment property, get in touch with us today so we can arrange your pre-approval. We will help you understand the process, which will allow you to shop around for your dream property with confidence.