Mortgage Pre Approval


Wondering what is the importance of mortgage pre-approval is? Learn the process of getting pre-approval and how it can help you in purchasing a property.



Going house shopping is difficult if you don't know what you can spend. Since it’s likely that most of us will need to take out a mortgage to finance a house purchase, it’s important that you know what your borrowing capacity is. One way to find out your borrowing capacity is to apply for preliminary-approval for a mortgage.

A pre-approval will be your first step in the home loan process. This lets you know how much a lender is willing to lend you. It is based on how much you earn every month, you monthly expenses, and how much you already owe. Most financial institutions offer a pre-approval that can last up to three months, giving you ample time to look for the right home.

Importance of getting mortgage pre-approval

Getting your loan pre-approved is a smart move because it gives you a better understanding on how much money you can spend on a house. This means you won’t be disappointed when it’s time to formally apply for a loan. It also saves you time with your house hunting process. For instance, if you qualify for a maximum loan of $400,000, you won’t waste your time looking at houses beyond that price.

Moreover, a pre-approval gives you confidence when you’re negotiating for a home. You can mention this to the real estate agent and use it as a negotiating tool. This way they’ll consider you a more serious buyer. It may add weight to any offers you make.

When bidding at an auction, having a pre-approval is also useful. If the hammer falls during an auction and if you’re the highest bidder you are committed to the purchase. You can only do this with confidence if you have a pre-approval so you know you can get the finance required to settle.

What is the process?

The process of getting pre-approval here at loans.com.au is quick and easy. First, you need to complete an online application form. Start by entering your loan details. Then you need to provide information about your current financial situation like your income before tax, your monthly expenses, your credit card limits, and your other ongoing loan repayments such as your car loans or student loans. After entering these details, your lender will lodge and assess your application. Then they’ll send your preliminary approval by email.

Buying a first home guide

Most people have questions as they start on the home buying journey, so we have pulled together some articles to help you.

From tips on how the home loan process works, to information on pre-approvals and buying a home, you can find it here.
 
We want to help you at each step of the way, whether you are just starting out, looking at properties, or ready to apply today.

DOWNLOAD

Buying your next home Guide

Most people have questions as they start on the home buying journey, so we have pulled together some articles to help you.

From tips on how the home loan process works, to information on pre-approvals and buying a home, you can find it here.
 
We want to help you at each step of the way, whether you are just starting out, looking at properties, or ready to apply today.

DOWNLOAD
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