Home Loan Pre Approval

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Getting home loan pre-approval

Home loan pre-approval is straightforward and something you should definitely get if you possibly can, no matter how much you are intending to borrow. Many lenders offer it and it is usually valid for three months. A pre-approval is similar to full finance approval except that the property you intend to purchase has not yet been determined. As you would expect, it is subject to the conditions under which it is approved, but it does give you a very clear framework within which to work.

Make sure you get formal written pre-approval

There are many ‘versions’ of home loan pre-approvals and many are only indications. If you want something you can rely on, what you are looking for is written pre-approval. It may cost you some money in processing and assessment fees, but is the only way to get pre-approval and allows you to negotiate with confidence or bid at auction under pretty much the same conditions as a cash contract.

Remember your valuation still needs to stack up

Bear in mind that your valuation will still be a condition of your approval. In slower real estate markets, valuations can often come in lower than you might expect. If you are intending to buy at auction or sign a cash contract, it is highly advisable to get the property valued prior to the auction or signing, through the lender you intend to go with.