Applying for pre-approval
Bidding or making an offer on a property without having pre-approval on a loan is a bit like going to the airport without your boarding pass. Secure your preapproval and know what your limits could be and which conditions may apply to getting fully approved – that way you can be more confident your offer will be accepted when you’re ready to make it.
What is loan pre-approval?
A loan pre-approval means that a lender has agreed – in principle – to lend you an amount of money towards the purchase, subject to certain conditions being fulfilled. While a pre-approval is not a full or final approval,it allows you to know your maximum available funds so you can narrow your search, negotiate with more certainty and bid with more confidence if you're going to buy at auction.
What are the benefits of pre-approval?
If you're looking to purchase a house, but you're not sure how much you can spend, it's difficult to know where to begin. You might find a property that seems perfect but have no idea whether it's a realistic option for your budget.
Pre-approval helps you estimate how much you can borrow, and what your upper limit is, which can help give you confidence looking for a house.
If your mortgage is affordable you're more likely to be able to save for things like holidays and to maintain your current lifestyle.
If it's your first home, then we really want to help you get this right – by not over borrowing. Because if you get your first home right, and you put a good amount of deposit down, it's going to help set you up for the future and stay in control, instead of chasing your tail.
It's a good idea to think about the future - you might have dual income now, but what if a baby comes along or you need to drop from two incomes to one, then one person's income may need to cover the mortgage. If you haven't planned for changes in your life, and you've borrowed 95% of the property's value, it can be high pressure.
So pre-approval can give you confidence to focus on properties you can afford. It helps you to understand how much you can borrow and think about how much you should borrow.
Home loan pre-approval is based on the ability to repay a loan for a specific amount based on your financial position, and it lasts for 3 months.
To apply for pre-approval, make an appointment with a Suncorp Bank Mobile Lender online.
Are there drawbacks to a pre-approval?
There aren't many drawbacks to obtaining a single pre-approval but having several in a short period can potentially harm your ability to borrow. Pre-approvals will be visible on your credit file as a loan enquiry. Many enquiries in quick succession with multiple lenders might create the impression that you're financially unstable.
This shouldn't discourage you from seeking pre-approval. However, it's a good idea to wait until you're seriously considering a purchase before seeking it, rather than applying early in the process when you might just be entertaining the idea.
Does pre-approval mean that my loan is guaranteed to be approved?
Does pre-approval mean that my loan is guaranteed to be approved? No. While pre-approval means that you're more likely to have a loan approved, it doesn't provide an iron-clad guarantee. The following factors – among others – can affect whether a loan for which you've been pre-approved proceeds to final approval:
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