Pre-Approval Home Loans
Giving you more negotiating power, vendors love to are you have pre-approved as it shows you are a serious buyer.
Pre-approval also gives you peace of mind that you are considering properties within your budget.
What is Home Loan Pre-Approval?
If you have been looking at buying property you need a pre-approval to make sure you
don’t miss out.
A pre-approval gets much of the paperwork out of the way, removes the uncertainty of
whether you can afford the property or not, and lets you get on with the important part
of finding the right property to buy.
A pre-approval is essentially the lender confirming that you meet the criteria for a home
loan with them, subject to contact of sale, acceptable valuation and possibly Lenders Mortgage Insurance approval.
Some of the advantages of a pre-approval include:
- NO OBLIGATION to take the finance – if you don’t want to use the approval you don’t have to.
- Pre-approval lasts for 90-180 days depending on the lender, with some having an option to roll over if the pre-approval expires.
- Speeds up the formal approval process – once you have signed a contract, generally, all the bank needs to complete is a valuation on the property.
- More NEGOTIATING POWER – Vendors LOVE to hear you have pre-approval as they know you are a serious buyer.
How much should I get pre-approved for?
It is recommended that you get pre-approved for the absolute most you would ever consider to borrow. You can always borrow less but if you end up requiring more than the pre-approval, the whole assessment process needs to start again.
Is a pre-approval unconditional finance approval?
A pre-approval is not unconditional approval. To be unconditional the lender generally needs to order a valuation on the property to confirm that it is acceptable security to them.