Let’s not waste time and jump upon the exact point that a majority of Melbourne people are eagerly waiting to understand correctly.
Home loan pre-approval means that the mortgage broker Melbourne reviews your information and decides whether you are a fit candidate for being approved for a mortgage or home loan. This decision is based on some initial information about your income status, creditworthiness, and financial position.
The primary difference between a pre-qualification and a pre-approval is that a pre-qualification is used to estimate how much a person can bear to spend on a house. In contrast, a pre-approval is used by the mortgage brokers in Melbourne to check the buyer’s credit and document verification to get a pre-approve a certain amount of loan from a lender.
What is the Importance of Getting a Home Loan Pre-Approval?
When you decide to make a purchase offer on a home, both your agent and the seller look for a pre-approval letter. This pre-approval document is like a proof that you are eligible to make the purchase. Getting a pre-approval document is of great benefit. It gives you an idea about the price range that you should look for while considering different homes. In the competitive housing market, Property agents and sellers consider a pre-approved buyer over a regular buyer who might not be able to close the deal.
If you decide to go forward with the help of a good mortgage broker in Melbourne like Vlend, they can not only assist you in getting a pre-approvals but also can negotiate a great deal on your behalf from lenders. You can be assured that the lender, loan option and interest rate Vlend will be offering is the most suitable as per your specific situation and needs. They at times have some of the best best refinance rates and cashback offers.
One crucial point here to note is that home loan pre-approval is valid for three to six months, depending upon your applied period.
When Should You Apply for Pre-Approval?
Once your research on different home loan brokers Melbourne, the idea of your borrowing, price range, and areas where you are likely to buy is over, then you should apply for a pre-approval. The right time of getting a pre-approval is when you are serious about purchasing a property.
Are Pre-Approvals Recorded on Your Credit File?
Your credit file has a record of all the pre-approvals. If you apply for too many loans in a short duration of time, it can have a negative impact on your credit score. When a lender checks your credit history, your pre-approval application will come up as an enquiry. It will show information related to:
- The enquiry date
- The reason for the enquiry
- Reference number
- The credit amount you applied for
- The credit provider.
With all this information, the lender will come to know about all your applied pre-approvals. Applying for multiple pre-approvals indicates that you are facing financial stress, and the lenders may see you as a high-risk borrower.
It’s really important that you select your mortgage broker Melbourne carefully before you request to proceed with your pre-approval application. Our suggestion is to take time in finalising with best mortgage broker Melboune, as this will decide the deals you can secure, experience you’ll have throughout the process and beyond. One tip – Go for specialised brokers who only focus on home lending solutions rather than selling everything.
What Comes After Pre-Approval?
After getting a pre-approval, it’s now time to go for auction or putting a offer in case of a private sale. Once you have secured your dream home you may have to resubmit the documents and full application for final approval. Once you have received the approval, lender will prepare your loan documents and will send you for signatures. Read the loan contract carefully before signing it.
However, sometimes even after providing all the valid documents, you might face rejection. In such a case, contact the best mortgage broker in Melbourne, Vlend. We shall help you sort all your pre-approval and loan issues effectively!