We often hear finance terms thrown around so it can be difficult to remember what they all mean. Here we explain the term ‘pre-approval’ to make things easier for you!
Put simply, pre-approval is a lenders written assessment of how credit worthy you are for a loan and is usually subject to some conditions that need to be completed, such as the value of the home you are buying. They will assess your ability to repay a loan based on factors including: income, living expenses and current repayments. They will also take your credit history, employment history etc into consideration to determine your willingness to repay. A lender wants to be confident you will have no issues managing your loan.
Pre-approval will reduce your stress during the house hunting period. Usually valid for a couple of months, you can visit display and homes for sale galore knowing that finance is ready for you. It is important to understand though, that pre-approvals are not a guarantee of finance. That is why it is important to speak to your mortgage broker as pre-approvals that can be completed online for example and may not always consider your ability to repay etc.
We will work with you to give you the peace of mind a pre-approval can provide!