NEVER TOO EARLY: OBTAINING YOUR PRE-APPROVAL

You’ve been mulling it over for some time, and now it’s a reality: you’re going to be moving home next year!

Whether you’re purchasing your first residence, upsizing, downsizing or sea-changing – moving home is an
important rite of passage that marks a new stage in your life. Word to the wise: before you buy those rolls of designer wallpaper for your new lounge room, slow things down and do the boring – but necessary – work of obtaining a finance pre-approval. A little paperwork done now with your broker will save you time, protect you from heartbreaking disappointment and will even give you the edge over other less-prepared buyers when it comes to signing on the dotted line. Here’s why.

Shopping for a new residence without understanding your financial capacity is a risky undertaking. You can easily spend months wandering a suburb you’ve got your heart set upon, only to learn that your budget doesn’t match your expectations. Before you begin house-hunting, meet with your broker to definitively understand your financial capacity and (if possible) obtain a pre-approval. You can then go on to browse suburbs which match your lending capacity, and negotiate robustly with agents – edging out less-prepared buyers and nabbing your dream home with less competition. Learning that you can’t afford to buy in an area you love can be a nasty shock – but losing a home to another buyer because you can’t offer unconditional terms (i.e. not subject to financial approval from the bank) is positively distressing.

Vendors and agents look favourably upon buyers who are well-prepared and able to offer unconditional contract terms, reducing the likelihood of a buyer ‘cooling off’ and even saving you money. A vendor will often prefer to take a slightly lower offer if it is unconditional or highly qualified – a benefit you can only offer if you’ve taken time to meet with your broker to understand your financial capacity.

Having a pre-approval can also help you participate in hotly-contested private sales where you may have as little as a working day to make your offer known – leaving no time to dilly-dally around with paperwork.
Similarly, if you are planning to purchase at auction, make sure you fully understand your lending capacity
– as sales made at auction are unconditional.

Have big plans for the year ahead? Let’s meet now to organise the necessary finance, putting you in a position of knowledge and negotiating power.