Are you suffering from homebuying FOMO?

How pre-approval can help

Homebuying is an exciting time, but it can also be incredibly frustrating. And with a fast-moving market, it’s easy to feel like you might miss out. Home loan pre-approval is a great way to speed up the lending process, give you market confidence – and put you at the front of the homebuying queue. Here’s what you need to know.

What is pre-approval – and how do I get it?

Home loan pre-approval is a conditional offer that confirms how much you are eligible to borrow, based on your financial situation. Your lender will make an offer after examining your income, your credit rating, and any outstanding debts. Although pre-approvals don’t replace the final loan application, many of the supporting documents are the same which means you’ve already done much of the heavy lifting paperwork in advance.

Why is it important?

Your lender will help you to understand the right home loan to suit your needs and home loan pre-approval gives you a clear idea of how much you can borrow. This helps you to conduct a focused home search, as well as keeping your sights realistic. Having loan pre-approval upfront also gives real estate agents and sellers more confidence in your offering.

How can pre-approval help me?

Securing a loan pre-approval in advance makes you an attractive homebuyer because it shows you are serious about the process. In a competitive market, where sellers often have the pick of the bunch, any advantage is useful in giving you an edge over the competition.

Any risks?

Home loan pre-approval is not a bulletproof guarantee of finance. Your loan application will still need to be approved – but having loan pre-approval means you are more likely to be successful. Avoid multiple applications in a short space of time as they appear as loan enquiries, and this can affect your credit rating

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