Why Get Pre Approved Mortgage Finance

Why Get Pre Approved Mortgage Finance

This is an email question from Darren in Maylands, What are the benefits of getting pre-approved finance for your mortgage?

There are many benefits to getting pre approved finance, lets look at them in more details.

One advantage is that will get to know how much you can borrow, the fees and repayments on your new home loan. This is important really, as it may help you make your decision, whether or not to buy your first home, next home, or consider other finance options, like bridging finance.

With pre approved finance too, most banks assess the application, so if there are any concerns from the bank or lender, you will know before you make any decisions, or put that offer on your new home. If the home loan is pre approved, then you have the comfort knowing, that more than likely there is a good chance your home loan application will be fully approved, once you find your new home.

The type of paperwork you may need to get pre approved finance is your latest payslips (or tax returns, if you are self employed), copies of bank statements, ID, etc.

Generally speaking with most banks or lenders, the pre-approved finance will last for 3 months. If you haven’t found your new home by then, its just a matter of getting another pre approval application to the bank or lender.

Pre-approval finance with most banks or lenders costs nothing, and if you choose not to proceed, once your finance is pre approved, it will cost you nothing. Generally speaking there is no obligation with pre-approved finance. Please note though, there are some banks or lenders that may charge a fee for pre approved finance, which may come off your mortgage application fee, should you proceed, or is non refundable if you don’t proceed. Speak to your mortgage broker for a guide to the fees and costs associated with pre-approved mortgage finance.

Another advantage too, if you are thinking of making an offer on a property, if your mortgage finance has been pre-approved, is the real estate agent or the sellers of the home, may look at your offer more seriously, as your finance has been pre-approved. You may have more negotiating power, as you already have done some ground work, giving the real estate agent or sellers, more confidence in accepting your offer, as they know you have pre-approved finance.

If you would like more information, please contact me anytime (MBL 0411 22 9602). If you have any comments, please leave them below.