Get a Real Pre-Approval in 4 Simple Steps
Having a home loan pre-approval before house hunting puts you in the best position to buy a property. It signals to sellers that you are serious and ready to move. Additionally, it improves your bargaining power and is crucial if you want to bid on a property. Not sure where to start? Here are 4 steps in securing pre-approval.
Step 1: Get Your Paperwork Ready
The first step is finding out how much you can borrow. It starts with getting your paperwork in order.
It would be best to show the lender how well you manage your financial obligations, with a clear picture of your income and expenses. To do this, you’ll need to proof of:
- Your pay slips and tax returns
- Any assets you own like other property or machinery, along with statements of any investments you might have
- Your credit card limit and outstanding credit card debt
- Loan statements for any debts or existing loans you have
- An outline of all your monthly and weekly expenses – use this Budget Planner we’ve created to calculate where your money goes each month.
Once you have all of your paperwork in order, it’s time to call in your mortgage broker.
Step 2: Lodge Your Application
Next, meet your broker to discuss a loan that fits your lifestyle and circumstances. Working through a panel of lenders, your mortgage broker will help you identify the right fit of lender and lending options.
If you want to apply for a pre-approval, complete a pre-approval application and submit this along with your supporting documentation showing your current financial situation
Step 3: Do a Credit Check
Afterward, your lender will conduct a credit check to assess your repayment history and creditworthiness. This report shows your history of repayments, including any defaults on loans or credit cards, as well as positive payment records. The results influence your borrowing capacity and the amount you can borrow.
Step 4: Get Conditionally Pre-Approved
Once your paperwork and credit history are checked, your lender may offer conditional pre-approval typically valid for 90 days. It’s an indication not a guarantee, of your borrowing amount pending conditions.With pre-approval, you can start searching for your dream home, keeping in mind your borrowing capacity beyond your deposit. Happy house hunting!
Ready to Get Started?
Securing pre-approval is crucial, and we can simplify the process. At Lending Connections, our experienced mortgage broker have helped countless first-time buyers. Reach out to us to learn more about applying for pre-approval before you begin your house hunt.