Before you embark on your property search, it's crucial to have a clear understanding of what you can qualify for. This ensures you shop within a set price range and avoid any disappointments along the way. That's where mortgage pre-approval comes in to protect you. Here are a few reasons why obtaining a pre-approval is a smart move:
1. Buying Power Clarity
A mortgage pre-approval outlines your buying power with precision. Armed with this knowledge, you can confidently shop for properties, knowing exactly how much you can comfortably spend. It can also give you time to identify any Government Schemes (i.e. First Home Guarantee Scheme).
2. Identifying Potential Issues
A pre-approval uncovers any potential issues that might arise during the mortgage qualification process. For example, it allows for the identification of mistakes on your credit report, giving you an opportunity to rectify them in advance.
3. Documentation Preparedness
By obtaining a pre-approval, you gain insight into the necessary supporting documentation required for a mortgage application. This allows you to be fully prepared, expediting the process and reducing stress.
4. Rate Security
A pre-approval can lock your interest rate from a servicing point of view, typically 90 days, depending on your mortgage product. This shields you from any potential rate fluctuations in the market. Important to note that not every lender offers this feature, some lenders will require
5. Heartache Prevention
Perhaps most importantly, a pre-approval saves your heart from the anguish of falling in love with a property that exceeds your financial reach. It sets realistic expectations, ensuring you focus on properties within your affordability range.
Getting a pre-approval is a a great peace-of-mind process that can give you certainty on your borrowing power. If you're interested in learning more about the property purchasing process please reach out on 0401 225 713 or lmckean@lbkprivatelending.com.au.