- Getting pre-approval is free and gives you considerable peace of mind, especially when you’re bidding at an auction
- Your pre-approved home loan is usually valid for up to six months, giving you time to find the right property
- It helps you set your maximum spending limit – particularly important at an auction
- It shows real estate agents and vendors that you are serious about purchasing a home.
Understanding pre-approvals and the subject to finance clause.
Posted on 12/10/2017
Understanding pre-approvals and the subject to finance clause.
Author: Courtney Thomas
What is pre-approval and what is subject to finance? Why it is wise to use a pre-approval on your home loan or a subject to finance clause?
What is a pre-approval?
When you have saved your deposit and you are ready to purchase a home, you will need to get pre-approval on your home loan – we can help you with this.
Pre-approval means a lender has confirmed how much money they are willing to lend you to purchase a home based on your deposit, income, expenses and personal financial situation.
Getting pre-approval is intended to give you a better idea of how much money you can spend so you can easily shop for a suitable home in your price bracket.
If you intend to purchase a property at auction, it’s important to secure pre-approval before you attend the auction so you can be reasonably sure you can borrow the required funds. Getting pre-approval will also give you a bidding limit.
It is important to note that even with pre-approval, a lender can still decline a loan application if they have concerns about the property you wish to purchase. For example, if they feel it is over-priced or that there’s something wrong with it, they may decline your application for a loan.
Benefits of pre-approval: