Getting pre-approval when applying for a home loan is not a pre-requisite, but it does have a hat-trick of key benefits for anyone looking to buy a home.
Pre-approval means a lender agrees to provide a home loan up to a specific limit and subject to certain conditions and is helpful because:
- You find out how much you can borrow, which limits your budget and helps you know which properties you can aim for when house hunting.
- You become a more attractive homebuyer who comes across as more serious and committed and gives you more confidence when bidding.
- It can speed up the approval process for the final application.
The first thing you'll need to do to go ahead and get pre-approval from a lender is gathering your relevant documents that show your identity, how much you earn, how many expenses you have and how many assets you own or money you owe.
Once you have all of those documents together, you can talk to us here at Perry Finance so we can work out how much you are able to borrow, establish the amount you will require for a deposit to buy a home you can afford, identify how much your monthly repayments are likely to be and check to see if you are eligible for any government home loan grants or concessions.
When ready to initiate pre-approval with the lender of your choice, Perry Finance can handle the paperwork for you, and the lender will confirm the pre-approval in writing.
How long lenders take to issue pre-approval varies between them, but it's generally short, anywhere between 3-5 days to a couple of weeks on average and once received, stays valid for around 3-6 months.
It's important to note that just because you have pre-approval doesn't guarantee you will get the loan. It is possible to be rejected from a loan application despite having pre-approval if the pre-approval has expired, your financial situation has changed, interest rates have gone up, the lender has changed its policies, the lender doesn't like the type of property you are buying, and/or the lender's mortgage insurance provider declines the loan in the instance where your deposit is less than 20 per cent.
Despite this, getting pre-approval can be a huge advantage if you are about to embark on a house hunt, especially come auction time, so talk to Perry Finance today to discover the benefits of securing pre-approval early on and positioning yourself in the best spot to pounce on your perfect property.