Why a pre-approval has never been more important

“Make sure you get pre-approved” is a sentence that you’ve likely heard if you are looking to buy a new home. But what is pre-approval and why is it so important? 

Back in the day it was simple enough to find a property you liked, then approach the bank for the money. There was little competition and houses stayed on the market for a reasonable amount of time. Sellers were also a lot more patient, and as long as you had a good offer, they were often inclined to wait until finance had been sorted. 

Fast forward to now, and the process is a lot harder and longer. Banks now require so much information and proof of ability to repay, that the approval process can sometimes take upwards of a few weeks to get a preliminary approval. If the market remains hot and you need to compete for a property against other buyers, three weeks is the difference between getting the dream home and completely missing out! It’s for this reason that it’s never been more essential to get pre-approved BEFORE you begin your house hunt to avoid disappointment. 

So what exactly is a pre-approval anyway? It’s a nod from the bank that you are able to borrow a set amount of money based on your current circumstances. It allows you to know what your budget for a property is, and allows the real house hunt to start. It also means that when you find the home you do love, the paperwork is mostly all in place, so that you can move with speed to make an offer and draw down finance. 

Pre-approvals are only given by the banks for a short time only, and it’s usually just a few months. If you don’t find a home in this time, it’s often simple enough to get a new pre-approval in place, however you will have to prove your circumstances haven’t changed. If they have, you may find your pre-approval will go up or down, depending on what has changed. 

If it’s time to start the house hunt, get in touch with us today and we can start the process for pre-approval. If you’ve already been pre-approved but it’s now expired, we can help with that too. Contact the team today on 03 441 1307