When it comes to determining your borrowing limit, online loan repayment calculators are a handy starting point, however, borrowers-to-be need to understand they provide only an estimate of a person’s borrowing power and ability to repay a loan. On the other hand, loan pre-approval provides a conditional approval of a loan amount and is usually based on an assessment of potential borrowers’ individual circumstances, needs and ability to repay the loan. This helps buyers really hone their property search and shop with confidence this year when negotiating on a property purchase or bidding at auction. Genuine loan pre-approval follows a similar process to a full loan application whereby borrowers will be assessed on their individual circumstances and needs and are required to verify their identity and ability to repay the loan. Other conditions usually need to be met to move to full finance approval, such as a suitable property valuation. Keep in mind loan pre-approval is usually a limited time offer, for a period of three to six months. As with any loan decision, it pays to shop around. Some lenders don’t offer it and some don’t go to the extent of conducting a thorough individual assessment meaning you could get a different loan limit upon applying for unconditional approval and, like those without pre-approval, you could miss out on a property if it’s above your loan limit. If you’re looking to buy in the New Year then consider getting yourself organised with loan preapproval. Top five benefits of a home loan pre-approval are that it: 1. It prompts you to begin thoroughly exploring your loan options at the beginning of the property purchase process. 2. Saves time (and lessens possible disappointment) by concentrating the property search in a feasible price range. 3. Enables real estate/buyers agents to see you as a serious property buyer. 4. Helps you gain confidence for bidding at auction or negotiating a purchase. 5. Quickens the settlement process as the loan is already part of the way approved.