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When is the right time to get a home loan pre-approval

1Mo ago 0 Replies 32 Views
What is home loan pre-approval?
Sometimes called conditional approval or approval in principle, home loan pre-approval is when a lender provides an estimate of how much you can borrow for a mortgage. It isn’t compulsory, but it does help you identify how much you can borrow and be a more strategic buyer.
Buyers need to know that even with pre-approval, they still need to pass the last hurdle of getting final approval from their lender. Without final approval, they won’t be able to purchase the property, so let’s look at four reasons to get pre-approval.
1. Competitive edge
Depending on where and when you are buying, the property market can be extremely competitive. By gaining pre-approval, sellers and agents may prioritise you as they are confident that you’re a serious buyer who can have the loan ready for sale.
2. Auction preparation
Pre-approval is an essential for buyers that are going to auction. Auctions can be daunting, very fast-paced and high-pressure environments, so knowing your pre-approval figure will help build your auction plan and know your limits.
3. Informed budget
Having a figure of how much you can borrow will help your search for the perfect home and be confident when attending open homes. If there’s a mismatch between the loan and the house you want, you may need to rethink your buying strategy or increase how much of your own funds you’ll need to contribute.
4. One step ahead
The buying journey is exciting. On the flipside, it includes a stack of paperwork. No one wants to be rushing around locating payslips and statements when they are under pressure to make an offer. While the pre-approval process doesn’t cover everything, it allows you to have the majority of paperwork sorted in advance.

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