Are you in the market for a new property? Picture this: You've found the perfect property, negotiated a deal, and are ready to make an offer. But wait, have you considered a pre-approval for your loan? In this post, we'll dive into the world of pre-approvals and why they're a game-changer for savvy property buyers.
What is a Pre-Approval?
Pre-approvals are like the golden ticket of home loans. They're not your final loan approval, but rather a conditional approval based on certain criteria. The key element here is that they give you a clear idea of your borrowing capacity. It's like a financial compass guiding you through the property market.
Avoiding Heartbreak: The Property You Can't Afford
Imagine investing hours in the search for your ideal property, only to discover that it's out of your financial reach. Heartbreaking, right? This is where pre-approvals shine. They help you avoid the disappointment of falling in love with a property that's not within your budget.
The Income Puzzle Unveiled
Income calculations can be a complex puzzle, and different banks have vastly different ways of verifying income. Let's delve into the details:
Overtime, Allowances, Casual Income and Second Jobs:
Some banks may consider 100% of your casual income, while others might take a more conservative approach. Understanding these nuances can be the key to securing the loan you need.
Minimum Tenure/Probation:
For those who are new to their jobs or still on probation, the income evaluation can be even trickier. Certain banks may require a minimum tenure before considering your income stable. A Pre-approval guides you through these lender-specific requirements giving you confidence around your borrowing capacity.
The Stress of Waiting
Now, let's talk about the stress involved in waiting for a loan to be approved. If you're already pre-approved, chances are the only thing you'll be waiting on (after signing a contract) is the valuation. This puts buyers at ease knowing they have already ticked most of the bank's boxes. No more nail-biting, sleepless nights wondering if your loan will be approved.
Credit Check: Friend or Foe?
Credit ratings play a crucial role in loan approvals. An unexpected surprise on your credit rating can be a hidden stumbling block for many buyers. Pre-approval checks can uncover these issues early, allowing you to address them and improve your creditworthiness over time.
A Seller's Perspective
Put yourself in the seller's shoes. If they receive multiple offers, who do you think they'd prefer to sell to?
Buyer A: $1,000,000 with a 14-21-day finance clause (no pre-approval)
Buyer B: $1,000,000 with a 7-14-day finance clause (with pre-approved finance)
The choice is clear. A pre-approval makes your offer stand out, gives the vendor confidence in you and tells the seller you mean business.
Your Trusted Partner in Pre-Approvals
At Private Finance Brokers, we're committed to your success in the property market. We understand that investing time in a pre-approvals without compensation might seem unusual, but we believe it's the right thing to do. It's about giving you the confidence to embark on your property-buying journey.
Ready to explore your options with a cost and obligation-free pre-approval? Contact Private Finance Brokers today. We're here to guide you every step of the way towards your property goals. Don't let uncertainty hold you back; let a pre-approval be your key to property success.
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