The process of securing your dream home or investment property in the fast-paced world of real estate can be quite challenging and highly competitive. Making an offer quickly can make all the difference between success and losing out.
Therefore, one of the most powerful tools you can leverage in the property market is a pre-approval. In this article, we will take a closer look at pre-approvals and why they are critical in navigating the ever-changing Australian real estate landscape.
What is a Pre-Approved Loan?
Essentially, a pre-approval is a written commitment from a lender that confirms how much you can borrow based on your financial situation. The right type of pre-approval involves a complete assessment of your financial situation.
Although it does not guarantee final approval, a pre-approval provides a solid foundation for your property search. It gives you a clear understanding of your budget, enabling you to act swiftly when you find the right property.
How do I get pre-approved?
Getting pre-approved involves a straightforward process that includes the following steps:
- Gather the required documentation: Ensure that you provide proof of income, employment details, tax returns, and information about your assets and liabilities.
- Choose a reputable lender: It is recommended that you work with a mortgage broker who can guide you through the pre-approval process. An independent mortgage broker will make finance simple for you and help you obtain a pre-approval.
- Complete the application: Accurately and comprehensively fill out the pre-approval application. This step is critical to ensure the lender assesses your financial health correctly.
- Wait for the assessment: After submitting your application, the lender will assess your financial situation and determine the amount you can be pre-approved for.
How long does pre-approval last?
It is essential to note that pre-approvals have a shelf life. Generally, pre-approvals in Australia are valid for around 90 days. However, this timeframe can vary among lenders.
Therefore, it is crucial to confirm the expiration date with your chosen lender. Should it take you more than 90 days to find a property you may need to extend or reapply for pre-approval.
Why get Pre-Approved Loan?
Several benefits come with obtaining pre-approved finance before starting your property search, including:
- A clear understanding of your budget: A pre-approval helps you establish a realistic budget for your property search, saving you from wasting time viewing properties that are beyond your financial reach.
- Increased negotiation power: Sellers are more likely to negotiate with buyers who have pre-approval, signalling that you are a serious and capable buyer. Having pre-approved finance could give you a significant advantage if you are up against other buyers interested in the same property.
- Quick decision-making: In a competitive market, time is of the essence. A pre-approval ensures your finance is ready and you can move quickly when the right property is available.
- Peace of mind: A pre-approval provides certainty some you can focus on the important things.. You can focus on finding your dream property without the stress of uncertain financing.
An essential tool for home buyers
In the dynamic and highly competitive Australian real estate market, pre-approval is a valuable tool that can streamline your property search and enhance your bargaining power. By understanding what pre-approval is, how to obtain it, and its benefits, you can position yourself as a well-informed and attractive buyer in the eyes of sellers. Therefore, ensure you explore the pre-approval option when considering purchasing property in Australia.
Use the best mortgage broker
As Melbourne’s best mortgage broker, What If We Finance has been assisting prospective homeowners in obtaining pre-approvals since 2008. With our unwavering commitment to excellence, we are at your disposal seven days a week, offering our expertise and resources to secure you an unbeatable deal. Contact us today. Find us here for more information.