The journey from the borrower to a homeowner is an exciting yet daunting process that can have many hurdles along the way. When it comes to buying property, carefully considering all of your circumstances and options alongside acting fast when you need to can be quite a balancing act. Which is why getting a pre-approval in place can ease these strains. A pre-approval may be called a series of things – from conditional approval to indicative approval. However, they all give an idea of how much you can expect to borrow from a lender. Conditional approval is handy because although yourself or the lender is under no obligation to proceed with the loan, it shows sellers you are serious about buying and you can afford the property. Below are some other reasons why getting a pre-approval may make your journey to being homeowner a little bit easier…
Having A Competitive Advantage
In a competitive property market, having a seller see you are getting a pre-approval for a loan will strengthen your offer. If a seller decides to weigh your offer against another, they may lean towards you if you are accompanied by a pre-approval letter. This indicts confidence that the buyer is financially capable of purchasing their home.
Spending More Time Examining The Right Homes
With a loan price indicated, buyers can start to decrease the inventory of homes to those that fit within their spending parameters. Many first home buyers will never move past the price point when shuffling through preferences. However, if all properties in your search fall within a reasonable and achievable price range, you can move beyond this and start weighing up the smaller details, such as garage and backyard space.
Getting a pre-approval can work to your advantage when it comes time for negotiation. This gives you the upper hand over other competitors. If the owner is eager to sell and wants assurance a deal won’t fall through, they may be more than willing to accept a lower offer from someone who is financially capable of purchasing their home.
Getting Taken More Seriously
A seller’s agent may be reluctant to invest time and energy into a buyer’s potential sale if they are not confident the result will pull through. Having a conditional approval in place shows your eagerness to buy, and that you also qualify to close the sale meaning that securing things like private viewings will be made more likely.
Getting a pre-approval will shorten the full loan application as it is already on its way to being finalised. If the settlement time frame is tight, or if the property is sold under auction conditions – this time saving can be crucial. Under certain circumstances, it is possible to shorten a 30-day closing to two or three weeks. This comes in handy if a seller needs to move quickly and will boost your offer to the front of the list!
Whatever you are looking for in a new home, make sure to speak to our independent consultants. They are here to help you 7 days a week and assist you with all of your queries regarding the new home building process or even investment opportunities. Call them on 1800 184 284, or book a call online.