Home Loan Preapproval

Home preapproval is an important part of the home buying process because it can save you a lot of time because you can be sure you are looking within your budget, and can save you a lot of heartache if you find the perfect home but then find you can’t afford it. However to make sure you really benefit from home loan preapproval make sure you know the right steps to go through to have your loan preapproved properly.

What Is Home Loan Preapproval?

Home loan preapproval verifies for you the exact amount that you can borrow from your chosen lender based on your income and your credit report information. Gaining home loan preapproval will also clarify the amount of deposit you need for the loan amount and the type of loan you are applying for.

This can help you check your savings are on track to meet your deposit amount and the settlement of the loan and gives you a budget for the home you are able to buy so that you can feel confident putting in an offer on a property or making a bid at auction, because you know you can back it up with preapproved finance.

When To Get Home Loan Preapproval?

The path to buying a home can be a long one whether it is your first or fifth property and you first start out on that path by deciding it is time to buy. Making a commitment to buy a home amongst all of the other options, such as renting, investing or staying at home is a big decision and you cannot proceed with the rest of the home buying process until you are 100% committed to buying.

Once you have made the commitment to buy you should look at getting preapproval soon after, and before you start house hunting. Preapproval can be a delicate balancing act between your budget and your house search because most preapproval is our only valid for up to 6 months, but you don’t want to start searching for your perfect home until you know the price bracket you should be searching in. Therefore get preapproval as soon as possible into your search for the perfect property so that you can be confident and informed in your search.

How To Get Home Loan Preapproval?

Knowing when and why is not enough, you also need to know how to secure home loan approval and make sure it is the right kind of preapproval which really is guaranteeing the loan amount. To secure your borrowing amount with home loan preapproval:

• Speak to Home Loan Finder. The type of preapproval you get will depend on the type of loan you are applying for and the type of property you are buying, but Home Loan Finder can make sure that you are issued with preapproval which is valid for your needs to give you the necessary buying power.
• Get preapproval in writing. Meeting with your mortgage broker or lender and giving the ball of your information and having them recommend the loan which is right for you and for which you are eligible does not count as preapproval. Instead to get preapproval which you can feel secure is backing you up when you make an offer on a property or bid at auction have your preapproval confirmed in writing, including any conditions of the loan approval process, such as approval being subject to the sale of your existing property for example.
• Preapproval shouldn’t cost you anything. Preapproval is an accepted part of the home loan process and should not incur its own fee. However keep in mind that there may be a fee charged if you decide not to go ahead with your loan for any reason, to cover the banks administrative time.

Home loan preapproval is an important part of the buying process and is not one which should be rushed through or overlooked.

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