What's next after home loan pre-qualification?
When you pre-qualify for a home loan, you’ll receive an estimate of your borrowing limit and what mortgage options may be available to you. It’s a good first step when buying a home, but now that you’re pre-qualified, what’s next?
Understand your borrowing power
With a pre-qualified home loan, you’ll get an idea of how much you could borrow given your current financial situation. If you find that it’s too low, you could improve it, but this may take some time.
When assessing borrowing power, lenders look at various factors like income, expenses, liabilities, savings, assets, and your overall financial position. By increasing income, savings, and assets or minimising liabilities or debt, you could strengthen your borrowing power considerably.
Use an online borrowing power calculator to help you get an idea of your borrowing power. You can see how your income and expenses can affect your overall borrowing capacity.
Search for properties within your price range
Now that you have an idea of your borrowing limits and home loan options, you can start your property search with more confidence. Although it’s only an indication and not as definitive as a pre-approved loan or a final home loan approval, a pre-qualified home loan can still help you find a home that’s within your budget.
You can use your pre-qualified loan to narrow down your options. You can more easily identify which properties are within your price range. You can also use a home loan payment calculator to figure out what your mortgage would look like.
Move forward with your home loan application
If you’re happy with your pre-qualification and are ready to begin house hunting in earnest, it’s time to go through the home loan application process.
You start by getting a pre-approved home loan. This is ideal for those who have a shortlist of properties already. You’ll need to submit proof of income, bank statements, assets and liabilities, expenses, and other financial documents. Applying for a pre-approved home loan will trigger a hard enquiry on your credit, which means your credit score may be docked a few points temporarily.
A pre-approved home loan gives you a better idea of how much you can borrow. It’s also proof to sellers that you’re serious about buying. You can use the pre-approved loan to shop with confidence and bargain with sellers. Apply for a pre-approved home loan online.
For those who have found their ideal property, applying for full approval is the next step. Check out our range of mortgage options and find out which suits your needs best.
If you have any questions, speak with the friendly lending specialists at loans.com.au. Or if you’re ready to apply for a home loan, you can start by filling out our online home loan application.
Find out in under 2 minutes if you qualify for one of our home loans.
About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
