Great, you're shopping homes, but do you know what the chances are if you can acquire it through a home loan? Here's a rundown of what you initially need to be closer to the reality of buying that dream house.
Preapproval is the process of determining how much money you can borrow to buy a home. For pre-approval your lenders look at your income, assets spending patterns and credit score to determine what loans you may be able to get approved for, how much you can borrow, and what your interest rate might be.
5 Things You Need to Be Pre-approved for a Mortgage
To get pre-approved for a mortgage, you'll need five things—
Proof of assets
Proof of income,
Good credit - Credit card statements
ID’s and other types of documentation your lender may require.
Here is a detailed look at what you need to know to prepare the information and be ready for the pre-approval process.
The process of getting a pre-approval typically involves applying to your selected lender, who will check your finances and assess whether you’ll be able to repay a loan.
If the lender offers conditional approval and deems you eligible, you’ll be granted conditional pre-approval to borrow up to a certain amount.
Most financial institutions offer conditional pre-approval which lasts for three to six months.
Gaining conditional pre-approval can be a useful thing to have while you hunt down the perfect home, providing you insight into where you may stand with lenders and potentially making you more appealing as a buyer by demonstrating you are ready to proceed with the purchase.
How to apply for pre-approval for a mortgage
It can be a hassle and the ins and outs can be stressful, Positive Income Properties can help you secure your pre-approval.
Below are typically what’s in the box in the application process;
Your financial health and condition - ask yourself these questions: can I afford it? Do I have enough monthly income to pay for all the monthly living expenses on top of the mortgage payments? How much are you planning to borrow and you can actually borrow?
Type of Home Loan: Fixed, Variable, Offset, and Redraw, which is best suited for me long-term? We usually recommend checking different offers from different lenders, consider the interest rates and other financial goal factors for comparison.
Complete the Application form - Positive Income Properties can help you in securing these and can give you an update of what’s happened to your application. You can also apply online or by phone when you check in with banks.
Preapproval assessments cover the below;
Credit report and credit history
Current financial situation
Capacity to pay
This will generally give you loan eligibility once approved.
Keep in mind that this is only the 1st step, a preapproval does not secure you a loan. Pre-approval should be attained before making an offer on a property, as it is the best indicator that your scenario will be acceptable by the lender, giving you the confidence to go house hunting, make an offer or participate in an auction.
If you need help or assistance in securing a preapproval, Positive Income Properties being full turn-key company can assist you in securing one. All you need to do is - let us know, talk to us and we will help.