If you are in the market for buying property, one of the smartest things you can do is get home loan pre-approval.
Why is that, you may ask?
Well, it’s because whether you are a first home buyer, a home owner looking to upgrade, or an investor in search of the next addition to your portfolio, arranging your finance early on in your property search has many advantages.
Here are some of the main benefits of home loan pre-approval.
Know what you can afford
One great thing about seeking home loan pre-approval is that it will let you know exactly how much you can borrow from a mortgage lender.
Online calculators can give you an idea of your likely borrowing capacity, but there is no substitute for going straight to the lender and seeing how much they are willing to loan you on a pre-approved basis.
This way you’ll have a concrete figure to work with and what’s more you’ll be able to save time looking for a suitable property by concentrating on only those you know you can afford.
House hunt with confidence
There are many unknowns associated with buying property. Real estate is a dynamic market and there is often a lot of competition out there.
You never know when a house matching the description of your ideal place might appear in the listings, whether luck will be on your side if it does, or if another buyer might swoop in at the 11th hour and pip you at the post.
That’s why any certainty you can lock in during the buying process can be a great asset and a real confidence booster.
Enter home loan pre-approval. This will put your mortgage finance on a solid footing – a considerable achievement that you deserve to be proud of.
Join the action at auction
Auction bids are unconditional so having your loan approved is a pre-requisite for taking part.
Without pre-approval you’ll be missing out on properties being sold under the auctioneer’s gavel – and this is a popular method of sale with vendors.
If you want to take your pick from a broader range of options, the choice is simple: get your lender to pre-approve your loan.
Show sellers you are serious
These days it is rare that only a couple of buyers show an interest in a house or unit on the market.
Growing population pressures combined with housing supply shortages can often mean that dozens turn out for viewings and auctions are fiercely contested.
Vendors that find themselves confronted with multiple offers have a lot on their plate and one of the things they need to evaluate is the seriousness of each expression of interest.
A buyer with a pre-approved loan is a much surer bet than someone who has yet to arrange their finances – and often vendors will act favourably towards the former.
The advantage can be even more pronounced when sellers require a quick turn-around time between offer and settlement. Having your loan pre-approved will make the process of gaining final unconditional approval even faster.
You’ve got everything to gain
For something with this many advantages you may expect to have to pay, but you’d be mistaken – home loan pre-approval is absolutely free.
This is perhaps the best argument in its favour: you’ve got nothing to lose by seeking it.
It is valid for up to three months and if you fail to reach a buying agreement during that time, all you need to do is reapply to restart that period.