Our 4-Step Checklist to Pre-Approvals – Get You Home Loan Ready!
Navigating the property market can be daunting, especially when it comes to securing finance. One way to simplify the process and reduce stress is by getting a pre-approval. Having a pre-approval in place gives you peace of mind and puts you in a strong position as a serious buyer.
Why Get a Pre-Approval?
Savvy homebuyers make sure they’ve secured their pre-approval before attending auctions or property inspections. This ensures you have clarity around your borrowing power, knowing how much (if anything) a lender is willing to offer. Being prepared means you can move quickly on your dream property, avoiding delays that could see you miss out.
What Exactly Is a Pre-Approval?
A pre-approval (also known as conditional approval) is an initial assessment by a lender of how much you may be able to borrow. It involves submitting your financial details, including income, employment status, and savings. It’s important to remember that a pre-approval is not the same as a full approval—it’s just the first step. Final approval will still depend on the property itself, a formal valuation, and further documentation.
However, not all pre-approvals are created equal. There are many lenders out there which rely on system-based approvals, this means that the applications are automatically assessed by algorithms rather than a person. While convenient, this approach can lead to issues later on. System-based approvals might miss important factors like how your income is structured or specific property requirements. A full human review may catch potential issues that a system-based approval could overlook, which might create a problem when you’re ready to move forward on your dream home.
How Long Does a Pre-Approval Last?
Pre-approvals typically last three to six months, depending on the lender. They’re not binding, so you’re under no obligation to borrow the full pre-approved amount. However, if your financial situation changes or the property market fluctuates, you may need to renew or adjust your pre-approval.
Your 4-Step Checklist for Pre-Approvals
Step 1: Review Your Finances
Take the time to review your finances and set a budget. Understand how much you’re comfortable repaying each month. If you need a hand, we can provide a budget template to help.
Step 2: Gather Your Documents
Collect all your documents, including income and employment details, identification, and a full list of your assets and liabilities. We’ll guide you through exactly what’s needed.
Step 3: Find the Right Lender
Choosing the right lender is crucial. We’ll help you consider factors like loan features, interest rates – taking into account your own financial situation too.
Step 4: Get your pre-approval!
Once we have everything ready, we’ll submit your application for pre-approval. Just remember, while it gives you confidence in your borrowing power, it’s not a full guarantee. Final approval will come after your lender assesses the property you wish to buy.
Beware of Multiple Pre-Approvals on Your Credit File
One important thing to remember: every pre-approval is recorded on your credit file. Applying for multiple pre-approvals within a short timeframe can negatively impact your credit score.
Pre-Approvals That Hold Weight
At Indigo Finance, we do things differently. We ensure that your pre-approval is thoroughly reviewed by a human assessor. This means we don’t just rely on algorithms; we make sure your financial situation is fully understood, reducing the risk of any surprises when it comes time for final approval.
We’ll guide you through the process, ensuring you avoid unnecessary hits to your credit score and we even offer a complimentary credit check as part of our service to avoid any potential issues before applying.
When you work with us, you can feel confident that your pre-approval holds real value. Our expert team is with you every step of the way to ensure your application is solid, reliable, and ready to help secure your dream property.
Ready to get started? Contact us today, and let us help you secure a pre-approval that’s truly worth its weight on paper.
