Buy with confidence
Buying a home is an experience like no other.
Filled with excitement and anticipation for open homes, new suburbs and lively auctions, people can soon feel frustrated and bewildered when it comes to finding the right home loan.
Much of this confusion is from not knowing enough about the different kinds of approvals and what’s needed for each stage.
I know the ins and outs of the approval process and can guide your clients every step of the way. I’ve summarised the three approval stages below but if you have any questions, get in touch.
Instant online approval
Online approvals are quick and convenient.
They give your clients an idea of what loans are available, how much they could borrow and what they might want to spend on a property.
It also gives them a chance to think about the impact a home loan will have on their lifestyle and approximate monthly loan repayments.
BEST for initial research, looking at different finance options and measuring borrowing potential.
BEWARE instant online approvals are just a guide and in no way legally binding. Without a complete application and assessment it’s impossible for lenders to give an exact quote.
Conditional approval
Clients should apply for this pre-approval when they’re ready to start house hunting or make an offer on a property.
This process can take some time while applications are completed and assessed.
Clients should be ready to provide information on their financial situation, including:
current and previous employment details
earnings
any debts
assets owned
if there’s a guarantor
whether they’re buying or building a home.
Once checked and verified a conditional approval is issued. This shows the lender is going to offer a home loan but subject to certain conditions, eg. finance being formally approved or a valuation being done on the property.
BEST for knowing the real amount you can borrow so you can go out and find ‘the one’.
BEWAREgenerally only valid for three months, conditional approval is still not a binding agreement and isn’t always enough to secure your dream home, particularly if the property is going to auction. Clients will only be able to make an offer on a property subject to the conditions of the approval and they won’t have access to any money until formal approval is received in writing.
Formal approval
For complete confidence clients should have formal written approval. This is confirmation that the loan has been approved and is legally binding once the contract is signed.
BEST when bidding at auction or making an offer on a property.
BEWARE clients must check the details of their contract and get legal advice before signing the formal approval.