Pre Approvals – how and why to get one
You may have heard a lot about “getting a pre-approval” when it comes to buying a home, but what it is it, and how do you get one?
A pre-approval is an approval for finance to buy a home. Your income is signed off, your deposit, and your price range. The lender provides you with a loan approval, which makes it clear what you can buy.
A pre-approval makes buy a house much easier as you know exactly how much you can borrow and any issues your application will have are already known and can be sorted before you offer.
If you have a pre-approval with no conditions then you can, if you wish, you can make an offer on a house without a finance clause. This makes it easier to win your offer as you have less conditions.
The process is the same as applying for a mortgage when you have an offer accepted, you just don’t send in a sale and purchase agreement, as you don’t have one yet, you just tell them your maximum price.
There are some times you cannot always get a pre-approval if your deposit is not at least 20%.
Sometimes there are so many conditions that it may not be worth much, such as when you are building and don’t have plans yet or specs yet.
How you get one, is to get your documents together, fill in the application form and submit it.
At DUX we always try to get you a pre-approval where possible, and make the process simple. So if you are looking at buying a home, you should definitely look at getting a pre approval.