One of the first steps you should take when wanting to buy a home, is to apply to a lender for a pre-approval for your mortgage.
A mortgage is a major financial commitment, and pre-approval is a process where a lender assesses your financial situation and determines how much money they are willing to lend you for a home purchase.
So why is it a good idea to be pre-approved before you select a home to buy?
Also, what will you need to secure a pre-approved home loan.
Benefits of a Pre-Approval
To know Your Home Buying budget is one of the biggest advantages of having a pre-approval.
It also gives you a clear understanding of your budget.
With a pre-approved loan amount in hand, you can confidently search for properties within your price range, saving you time and avoiding any disappointment.
Competitive Advantage
Having a pre-approved loan puts you in a stronger position and enables you to move quickly when making an offer on a property.
Real estate agents and sellers consider pre-approved buyers as serious and reliable, giving you an advantage over other potential buyers.
Faster Process
When you find a property that you want to purchase, you won’t have to wait for the lender to go through the full application process, as much of the groundwork has already been done.
The lender just needs to sign off on the property you are looking to purchase and clear up any remaining conditions on the pre-approval.
You just need to make sure you purchase a property within the timeframe that the approval is valid for. Most banks will give you 3-6 months before they need to re-assess your application again.
Auction Bidding
If you plan to purchase a property at auction, then having a pre-approval is essential. Auction bids are unconditional, meaning you need to have your finance arranged beforehand. By having an unconditional pre-approval, you can confidently bid without worrying about the financing aspect.
How to Obtain a Successful Pre-Approval
To obtain a pre-approval, you’ll need to provide certain documents and information along with your application to the lender.
While the exact requirements may vary between lenders, here are some common documents you will most likely need:
- Identification
- Proof of Income
- Bank Statements
- Confirmation of Deposit.
The lender will also run a credit check, so it’s a good idea to have a look over your credit report beforehand. You can do this via websites like Equifax.
How A Mortgage Adviser Can Help
A Mortgage Adviser understands the complexities of the mortgage market and can provide valuable assistance in securing a pre-approved home loan.
With access to a large panel of lenders, iLender can guide you through the application process, helping you get together all the necessary information, so your application can proceed smoothly and efficiently.
Even if you have been declined or told it may be challenging to get a pre-approval directly from your bank, a Mortgage Adviser can help present a thorough application that highlights your strengths and mitigates any weaknesses. This goes towards trying to turn it around for you.
Some banks stop doing pre-approvals for new-to-bank customers, which means if your own bank wouldn’t approve you, you would be limited for choice elsewhere.
So if you are serious about your ability to purchase your new home, getting pre-approved while banks are offering pre-approvals is even more important!
So, feel free to reach out if you need a hand, or just to have a chat about this, pick up the phone and call 0800 LENDER (536337) or email to [email protected]
