While many first home buyers are taking advantage of the various State and Federal Government assistance schemes available to get on the property ladder, some are finding the confidence to buy using a home loan pre-approval, also known as conditional approval, to help secure their first home.
Being pre-approved isn’t a compulsory step in the process of buying your first home, but it can give you a significant edge over the competition and increase your confidence when house hunting. With a home loan pre-approval, you’ll know exactly what your budget is and be in a position to confidently make an offer immediately. Sounds good, right?
So, what exactly does it mean to be pre-approved and how do you go about it?
Well, we’re here to help with all you need to know, including what a home loan pre-approval means, the benefits, and how to get pre-approved for a home loan.
What is conditional pre–approval?
A conditional home loan pre-approval is a really simple way to boost your house hunting confidence. Basically, your lender will assess your financial situation to provide you with an indication of how much the bank is willing to lend you.
It’s important to note that you’re not obliged to take the loan. Similarly, the lender is under no obligation to lend you the money. The point is that it demonstrates to sellers that you’re serious about buying and that you’re confident you can afford the property.
One thing about applying for conditional pre-approval to be aware of is that a credit check will likely be completed, and this may impact your credit score. It’s best to only get a pre-approval with your preferred lender, rather than doing multiple applications.
While a pre-approval isn’t mandatory and you can still apply for a home loan without pre-approval, it does give first homebuyers a really good indication of how much they can borrow. It can also help you avoid the disappointment of signing a contract on your ‘dream house’, then realising you can’t borrow enough to purchase it.
What are the advantages of conditional 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 finances and can confidently place an offer. For auctions, some lenders may have a different pre-approval arrangement that provides even more certainty.
Another advantage to getting pre-approved is that it means you’ll have done most of the paperwork in advance, so you won’t be chasing pay slips and bank statements when the time comes to apply for the loan.
How do you apply for conditional pre-approval with Great Southern Bank?
There are a number of ways you can apply for conditional pre-approval with Great Southern Bank. Perhaps the quickest and most convenient is to apply online.
If you’d rather speak to a Home Loan Specialist, call 133 282 or arrange an appointment at your local branch.
Whichever route you take, you’ll be asked about your income, your expenses, and how much of a home deposit you’ve saved. You may also be asked about the type of house you’re looking to purchase and which suburbs you’re considering.
What happens next?
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.
Like to know more about applying and buying a home? Check out our Clever Way Home podcast with Sophie Tieman.