You’ve heard about the mortgage pre approval process. You know you need to complete it before you can buy your own house. Yet, what is it actually all about? If you aren’t too sure, this article will help you understand it better.
What is a mortgage pre-approval?
Long story short, it’s the estimate of how much money a lender is willing to let you borrow for your home loan. To add, it’s also when a mortgage lender reviews your ability in repaying a mortgage loan. This is done by checking your credit, income, and full financial profile.
Why do you need a mortgage pre-approval?
I know how tempting it can be to just pull up a house listing on your computer and be done with it. Yet, unless you have pre-approval at the ready, things won’t go as smoothly as you want it to be. Having a mortgage pre-approval puts you at a higher advantage because:
- You get an idea of how much you can borrow.
- It lands you a more competitive offer.
- It alerts you to any potential problems.
All in all, the pre-approval process saves you from hassle when you start your home search.
How do you get mortgage pre-approval?
It’s a lot easier than you think it is. Here’s what you need to do.
Prepare all the needed documents.
Not all lenders have the same requirements when it comes to mortgage pre-approval. In general, you will need to fill out an application form and ready any financial data you have about your:
- Bank statements
- List of Assets
- Debts and liabilities statements
- Income documents
- A list of living expenses
A lender might ask for further info depending on your specific situation so it pays to prepare.
Improve your credit score.
Your credit score plays a key role in boosting your chances of getting pre-approved. Raising your credit score takes time, so I would suggest you take these measures ahead of time. A few tactics you can practice include paying bills on time and maintaining a healthy credit line.
Get to know your mortgage broker.
You want to get the best deal when it comes to buying a house, don’t you? Then, it would be in your best interest to shop around before choosing a lender. You see, each lender has their own set of options and guidelines. Getting familiar with what they have to offer lets you make an informed decision.
Also not all pre-approvals are made equal. These days some banks will give you a pre approval without even looking at your payslip! This is why you need to consult with a good mortgage broker.
Consult a broker to help you with mortgage pre-approval.
Do you really need a professional? Yes, you do. Expert advice puts you at a higher advantage since you never have to second guess anything. Each action you make becomes well guided so that you can save both time and money.
With the right approach, getting a mortgage pre-approval isn’t difficult at all! If you still have other concerns about the topic, go ahead and send me an e-mail about it. We’ll discuss your questions in detail and resolve them one by one. Once we have that taken care of, I’ll guide you through the process so you won’t have a hard time getting pre-approved.
Will Bell Mortgage Broker is a mortgage and finance broker based in Melbourne specializing in residential home loans. Will is all about the average Australian understanding just enough of the broader economy to take action on your own personal economy. He is the host of the My Personal Economy Podcast which you can check out here.
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