What is a Home Loan Pre-Approval?
If you are thinking of buying a property – be it a new home or an investment property – getting a pre-approval is almost always the sensible thing to do. A pre-approval confirms your borrowing capacity and gives you the confidence to bid, knowing that your bank will lend you the funds for which you are pre-approved.
What is involved in a pre-approval?
The pre-approval process is very similar to a full home loan application. You will need to provide details of your income, expenses, savings / deposit and existing financial commitments. All that is missing compared to a full home loan application is that there is no contract of sale and no property to use as security for the loan. Once the lender has reviewed your documents they will confirm that they will lend you the amount for which you have applied. There will be conditions attached to this pre-approval. The conditions will include:-
- No change in your employment status or income.
- That the property purchased is deemed acceptable to the lender.
A pre-approval is usually valid for 90 days (sometimes 180 days) and can usually be extended if a suitable property has not been bought within this timeframe.
So, if you are thinking about buying a property, give Mortgage Choice Camberwell & Canterbury a call on 0439 841 539 to discuss whether a pre-approval is right for you.