Mortgage Pre-Approval - Get the Advantage
We have all looked at a beautiful home and wondered what it would be like to live in it, allowing our imaginations to go wild thinking of the possibilities. When you’re actually in the market to purchase a home, this day dreaming becomes a reality and there is nothing worse than finding out that you can’t afford your dream home. The good news is that there is a way to avoid this from happening.
Getting pre-approved for a mortgage essentially gives you permission to look within a certain price range before you have found the house you love. Pre-approval, otherwise known as “conditional approval” or “approval in principle”, is about getting the OK to take out a loan based on your financial situation before you add a house into the equation. It basically means that based on your current financial portfolio, you’re a desirable candidate and a bank is confident in bringing you on as a customer. Pre-approval is granted by presenting your portfolio to the bank, preferably by way of a broker who knows how to package and position your application as well as who to target to meet your specific needs. It will involve the broker presenting your existing financial situation which will include your savings, income, assets, debt and typical expenses.
If you have been lucky enough to be pre-approved, you have a definite advantage over other potential property buyers. For one, you’re walking in to a real estate agency as a serious buyer and agents will be very willing to dedicate time to you as you are already guaranteed the financing necessary to finalise a sale.
Once you’re looking at the prospects and possibilities, you’re going to be looking within the parameters that have been set by the lending institution. You’re not going to experience the disappointment of falling in love with a home only to be told that you can’t afford it and have a sale fall through. Only looking at homes that you know can definitely be yours means that you’re getting a thorough education of what you can get for your money. Rather than getting confused by value, you are going to see consistent examples of what your money is currently worth in the property market and be able to continue making smart financial decisions for yourself.
Once you have found your dream home, you’re liking to want to move into it and start the rest of your life as soon as possible. Unfortunately, property sales need time to settle and one of the biggest hold ups in the process is waiting for financing approval. But instead of waiting weeks or months to move in, mortgage pre-approval means that you can request a swift settlement as most of the work has already been done. Most of the time, this will also make you an attractive buyer to the seller.
Looking for a house is stressful at the best of times - and even more so when problems occur. By getting that mortgage pre-approval “in the bag”, you'll smooth out many of the bumps in the journey to your new home before you encounter them. Engaging a broker who is familiar with this process will not only help you find the best mortgage to meet your financial needs, it will give you access to the wealth of industry know-how they have at their fingertips.
As well as being able to answer all your house-hunting questions, they will be able to recommend other trusted professionals that will help you - including conveyancers, insurance brokers and even buyers agents to ensure the transition into your new home runs as quickly and effortlessly as possible.