What is home loan pre-approval?

Pre-approval means a lender has given a conditional ‘thumbs up’ for your home loan. Having loan pre-approval in place gives you a firm buying limit – and that’s a big plus to help you set a realistic buying budget when looking for a new home.

With pre-approval in hand you’re also in a much better position to negotiate on price, so don’t be shy about letting real estate agents know your loan is pre-approved. If you’re buying at auction, loan pre-approval is critical as it gives you a limit, and if you are thinking about buying off the plan, the developer may want to know that your loan is pre-approved.

There are different types of pre-approval. The one to aim for is where the lender has seen details of your income, your household expenses and other debts to enable it to make an informed decision about your eligibility for a home loan. Not all lenders offer home loan pre-approval, and that’s where your Mortgage Choice broker can help, letting you know which lenders offer pre-approval, and guiding you through the process of applying for your home loan. Loan pre-approval usually lasts around three to six months. Lenders will want to know if anything major has changed during that time – like your job or income, once you’ve found the property you’d like to buy.

Even better, our home loan service comes at no cost to you. And, a Mortgage Choice broker gets paid the same rate regardless of which home loan you choose from our wide choice of lenders. So why not contact your Mortgage Choice broker today about arranging home loan pre-approval.

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