A formal pre-approval is a critical step in purchasing property - it's when a lender gives you an approved amount to borrow based on a full assessment of your financial situation.
What this means is that you can attend auctions and know what your price limit is and how much your repayments would be at a certain price range. Even if you're borrowing a small amount, a formal pre-approval is a good idea. You'll know exactly how much you have to play with, putting you in a stronger position to negotiate with a vendor or bid at auction.
Advantages of home loan pre-approval:
You'll know exactly how much you can spend
You know what your repayments will be
Your final loan will be organised faster
There's no cost to you