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Understanding Pre-approval

If this is your first time buying, pre-approval might be a new concept to you. Here’s how it works.

The vast majority of buyers will (at some stage) approach a bank or lender for a home loan. As a buyer, you’ll be asked to provide certain information about your income, etc to prove you can comfortably repay your loan over time. Once your loan is approved, the deal on the house is done and money is exchanged.

In a nutshell, pre-approval means that you’ve spoken to a bank or lender and have provided all the required information, and you’ve been approved to borrow a set amount, if and when you find a property you’re ready to buy.

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Will you need pre-approval?

What are the advantages to securing pre-approval for a home loan?

  1. FOMO

    Fear of missing out is never felt so acutely as the moment you lay eyes on the perfect property to suit your needs. Pre-approval lets you take action and lock it down on the spot.

  2. Obligation-free

    Once you secure pre-approval, you may not find exactly what you’re after in a property for some time. No worries – you can easily renew your pre-approval and continue your search.

  3. Pick Me!

    If you enter into negotiations with a seller, and they’re weighing up their options between two identical offers, knowing you’re pre-approved may tip the balance in your favour.

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How the approval process works

  1. Get in touch with us

    When you are ready to start searching, contact your local branch or apply online and a lender will contact you. Our lending experts will be able to let you know how much you can borrow, after assessing your income and commitments.

    A “Conditional Loan Approval” (subject to valuation) will be issued, and this is a great real estate negotiating tool, as you have already checked your borrowing capacity. It’s worthwhile before you start searching for properties to organise a conveyancer/solicitor.

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  2. Start your search

    Start looking! Once a home is found, simply contact your lender who will confirm your income/commitment details and organise for a valuation to be undertaken on the property.

    Once a favourable valuation is received, your loan is sent for approval. Once your loan is approved, the exchange can take place. Settlement is normally around 6 weeks (although can be sooner or later if both parties agree).

Enquire About A Home Loan

If you are after some more information, a loan pre-approval or are ready to apply for a home loan, start a conversation with a Greater Bank lending expert today to help you get what you want sooner.