Without getting a pre-approval from the bank first, you can easily miss out on securing a home.
Stories of heartbreak are common at auctions, where the buyer puts down a deposit after winning but then wastes precious time applying for a mortgage that may be declined.
So what is a pre-approval and how can it give you piece of mind when entering into a deal with the seller (vendor) and how do I know it can be relied upon?
Banks and lenders offer a number of different types of pre-approvals.
They range from a simple 2-minute online application, to a formal document, written and signed by you and the bank.
A Pre-approval that you can confidently start searching for a property is one where:
✔ Your loan has been pre-assessed by a bank. You have provided income details via payslips etc and other documentation. You have signed an application form for the bank
✔ The pre-approval is valid for 3 months (some Lenders 6 months).
✔ You know your maximum purchase price.
✔ You know that your personal situation meets their lending criteria.
✔ The bank hasn’t yet confirmed that they’ll accept your property as security, until you find one.
✔ The pre-approval may be subject to you meeting certain conditions.
Why should you secure a formal pre-approval?
Securing a formal pre-approval is the only way to make sure you can negotiate confidently with vendors, whether it’s at an auction or not.
Without a signed letter, some sellers and real estate agents won’t accept your offer, as they can’t guarantee that you’ll get the necessary finance.
Make the process of looking for your home, a fun time, no tears if you obtain the pre-approval paperwork, ask Green Apples Finance Australia to arrange one for you today!