So you’ve decided you want to get onto the property ladder and you’ve already been busy trawling the net for the perfect home.
It’s good to keep a level head and be realistic about what you can afford. Shop around and explore your options so you can find the best deals out there! Thankfully, most lenders have online mortgage calculators so you can get a quick idea of how much you can borrow by simply adding a few details.
So, what are the benefits of obtaining a pre-approval?
With a pre-approved loan, there are fewer chances of hiccups with the sale process, and alleviate any worries a seller may have, knowing the buyer is serious.
In addition, if you decide to make an offer you’ll be in a position to move quickly if your finance is sorted.
Some of the other benefits of a pre-approval:
- It’s FREE
- It’s valid for up to three months
- It gives you clear guidance on how much money you can spend
- You won’t be setting yourself up for disappointment if you think you can spend more than your lender agrees to lend you
- It allows you to shop with confidence
- It shows your real estate agent that you are serious about buying a home. Some agents won’t spend their time showing you homes in-case you don’t come through with the finance
What will I need to provide when applying for a pre-approval?
There are two types of pre-approvals available. The first is where you can jump onto any lender’s website and determine how much you can borrow based on basic calculations. This type of pre-approval isn’t really worth the paper it is written on.
A real pre-approval involves credit checks and should involve you engaging the services of a mortgage broker. They will evaluate your whole situation and future plans (such as children or change in work circustances) before determining a management repayment rate and how much you can borrow.
When applying for a pre-approved loan you will need to provide some additional documentation, such as:
- Proof of deposit
- Proof of income
- Monthly expenses and other outgoings such as personal loans and credit cards.
As long as you meet the requirements then you should have a pre-approved loan, so now you can find your dream home!
Once you have found a your perfect home, submit your offer and buy a house! From here, depending on your situation, a finance approval can come through within the space of a week, but generally takes up to 3 weeks, depending on whether a valuation on the property (or subsequent properties if guarantors are involved) needs to take place.
Whether you are looking to buy your first home, move home, refinance, or invest in property, Naked Edge Real Estate is here to help, so contact us today!