Do I need a home loan pre approval?
Short answer: absolutely, but be sure you are not caught out in the process.
People tend to think a loan pre approval is a waste of time. That is certainly not the case. Applying for a home loan pre approval is an important step in the property buying process as it determines whether or not the bank will approve your loan.
However, we cannot stress enough to make sure obtaining a pre approval does not become a trap. Your circumstances can change as can bank policy which can affect your borrowing capacity or even the chances of being approved. This is why it so important to work closely with your home loan expert who is up-to-date on bank policies so you can proceed with confidence.
Searching for the perfect home is hard enough, and it can be made much easier when you know what your borrowing capacity is and if the bank will even approve your loan. Home loan pre approval gives you the confidence while shopping around. If you do not know what your buying capacity is, you are just shopping blind, right? After months of searching, the last thing you want is to be at the auction of the home that fits all your criteria, but are unable to get a slot in due to financial uncertainty.
What is home loan pre approval?
Home loan pre approval is where the funds for your mortgage are pre-assessed by a bank, up to a certain limit.
It is popular as it gives you the security to purchase a house knowing you have the financial power to make it possible through knowing your maximum purchase price. A home loan pre approval lasts for anywhere between three to six months, depending on the lender and changes to your circumstance or bank policy. Our home loan experts will assess your current situation and tailor a suitable home loan pre approval and work closely with you to ensure it remains valid while you shop around.
There is a difference between pre approval and formal pre approval. A formal pre approval is the only pre approval you can rely upon. It is more than a simple two-minute application online and involves obtaining a signed letter from the lender, with your purchase limit specified. It is imperative that you acquire a home loan pre approval before an auction, as some real estate agents and sellers will not accept your bid without it.
How can a home loan pre approval help me?
Home loan pre approval can assist with providing you a price range to narrow your property search down.
It will obviously be a massive waste of your time investigating homes above your home loan pre approval limit. Looking at potential homes is exciting, but it is also time-consuming, so the home loan pre approval will not only narrow your search down but it will also shorten the loan process. It gets money into the seller’s hand quicker, and you do not need to wait for your lender to give you the green light. This increases your chances of the seller accepting your offer.
Besides saving time, this will also protect you while making offers. Imagine if you made an offer or put down a deposit when you cannot afford the property in the first place. This is not the type of situation you want to be in.
How can I get a home loan pre approval?
To get a home loan pre approval, request a call back from one of our friendly home loan experts. We will endeavor to find the best fit for you.
Our dedicated team of experts have years of experience and understand the market well. Buying a house is a daunting process, and most likely the biggest financial commitment you will ever make. So let us simplify the process for you, and assist you with getting into your dream home.