Pre-approvals

The importance of pre-approvals: All you need to know

The property boom is showing no signs of letting up any time soon. It’s super competitive out there with many vendors receiving multiple offers within just a few days of going on the market. So, if you are looking to purchase your first home or make a move, pre-approvals are essential.

 

What is a pre-approval? 

It is essentially a mortgage approval subject to certain conditions being met, such as:

  • Finding a suitable property
  • Obtaining an Registered valuation (not always required)
  • A PRE-APPROVAL PUTS YOU UNDER NO OBLIGATION TO THE LENDER.


Why get a pre-approval?

There are huge variances in credit policy between banks in the current housing market, if you sign up to buy a house and then it takes too long to obtain finance you could end up losing the opportunity to buy the property.

When you have a pre-approval you know how much you can borrow which will put you in a better position to negotiate. Pre approvals are currently valid for 3-6 months, giving you plenty of time to look around for a home of your choice.


How long will it take to put a pre-approval in place?

It pays to get organised in advance. From the time we receive all the necessary information we can usually obtain an approval within 3-7 days. However, the banks can be a bit slow from time to time, especially if the mortgage is over 80% of the property’s value. If you are borrowing over 80% allow for 7-10 working days to get an approval. It is best if you speak with us early in your house buying process!


What paperwork is required?

STEP 1
Complete an application that sets out your assets and debts, income and expenses.

STEP 2
To verify the figures we need to support the application with proof of income (usually the last 3 pay slips), proof of a saved deposit, and 3 months of bank statements.