Benefits of a home loan pre-approval
Apart from assisting your search, a pre-approval shows real estate agents and, more importantly, sellers that you’re a serious buyer. You’ve done your research, started sorting your finance and can confidently place an offer. For auctions, some lenders may have a different pre-approval arrangement that provides even more certainty.
Disadvantages of a home loan pre-approval
There aren’t too many cons when it comes to getting a pre-approval. One to be aware of is that a credit check will likely be completed, and this could impact your credit score. That’s why it’s best to only get a pre-approval with your preferred lender, rather than doing multiple applications.
Applying for a home loan pre-approval is as easy as having a chat with your preferred lender about your financial situation. They’ll ask about your income, your expenses, and how much of a home deposit you’ve saved. They may also ask about the type of house you’re looking to purchase and which suburbs you’re considering.
As a guide, most pre-approvals are valid for 90 days, which should give you enough time to find a place to call home. If you sign a contract of sale with a pre-approval in hand, your lender may ask a few more questions and request updated documents, like your latest payslips and bank statements before confirming full approval.
Does a pre-approval guarantee home loan approval?
No, but it will provide a really good indication of how much you could borrow. Once you’ve signed a contract of sale, the lender will usually arrange a valuation of the property and want to verify the details of your financial situation. Another factor that may impact the final outcome is the prevailing market conditions.
Getting a home loan pre-approval can deliver a great deal more clarity and confidence when looking for a home. Ready to get a home loan pre-approval online ? It’s the more convenient and quicker way, so you can stay focussed on looking for your dream home.