4 reasons to look for pre-approval on a home loan
Whether you're shopping for a first home, a new home or an investment property, having pre-approval can help give you an edge during the buying process.
This article is sponsored by Ubank. Ubank offers fast pre-approval on a range of home loans that fully-assess your financial situation so that first time buyers, owner occupiers and investors can have the confidence to move forward. To find out more, visit Ubank online today.
Applying for a home loan is an involved process. It requires a very close look at your existing spending habits, savings, credit history and more.
So if you're thinking about looking for property, it makes sense to get the process underway as soon as possible. This is where pre-approval can help. Home loan pre-approval indicates how much a lender is likely to be able to loan you.
In practice, a home loan pre-approval allows you to start shopping for property with an idea of what you could borrow and therefore, what you can afford to buy.
With this in mind, we're taking a closer look at some of the key questions people ask about home loan pre-approval.
1. Can home loan pre-approval help you understand your borrowing power?
Yes. In fact, pre-approval for your home loan can help provide several insights into the overall purchasing process. It can help you understand:
- How much you're able to borrow vs how much you want to borrow
- Which areas you're looking in and the type of property you want
- What sort of repayments you'd need to make.
Having this kind of information before you make a purchase can help you plan your finances more effectively. To get started with the process, you can use tools like Ubank's calculators.
2. Can home loan pre-approval help speed up the purchase process?
Yes. Pre-approval could help to cut the time between making an offer and unconditional finance approval.
Sellers (and their agents) often look for prospective buyers who can demonstrate they have taken steps to secure finance and are ready to go.
So if you have pre-approval and a rival buyer doesn't, it can potentially give you an edge in negotiations or in having your offer accepted.
But it's also important to make informed decisions, too. Before you begin the loan approval process, some lenders will have in-house home loan specialists who can help you understand your options, the best way to apply for finance with them and how to obtain pre-approval.
Ubank is a lender that can facilitate this process.
3. Can I be confident in the amount I've been pre-approved for?
Generally, yes. However, pre-approval is not a confirmation of the amount you can borrow; rather it is an indication of how much you may be able to borrow.
Sometimes you'll find that you can borrow more than the pre-approval initially indicated. On other occasions, it may be less – so offers and bids should be
made carefully as each lender differs slightly in their requirements for preapproval.
As an example, Ubank is a lender with a pre-approval process that fully assesses your financial situation so you can have more confidence to make offers and bid.
4. Can having a pre-approval give me time to shop around?
Yes. Having pre-approval is generally associated with being able to make fast buying decisions, but that doesn't mean you need to buy straight away. Most pre-approvals last for 90 days.
You may also be able to extend them by up to a further 90 days with certain lenders, including pre-approvals from Ubank.
This lets you inspect properties at your leisure and make sure you find one to suit your needs. So, pre-approval can give you more breathing room in making your decision, if you need it.
Home loan pre-approval with Ubank
Whether you're looking for your first home or your next property, Ubank has fast pre-approval on a range of home loan options to give you the confidence to move forward and land the one you're after.
Ubank home loan features include:
- Loans for owner occupiers, investors and refinancers
- Multiple offset accounts on Flex variable home loans
- Fee-Free redraw on extra repayments to give you more flexibility^
- No LMI on home loans, including purchases with a 10% deposit.*
- Aussie-based support before, during and after the loan application process.
To find out more, visit Ubank online today.
Learn more about home loans with Ubank
This article is sponsored by Ubank. Ubank offers fast pre-approval on a range of home loans that fully-assess your financial situation so that first time buyers, owner occupiers and investors can have the confidence to move forward. To find out more, visit Ubank online today.
Key takeaways
- Pre-approvals are an indication of how much you could borrow from your lender that allows for you to shop for property, ahead of a formal loan approval.
- Having pre-approval while shopping for property can sometimes provide an edge in comparison to prospective buyers who don't have it.
- Pre-approval generally lasts for 90 days, though this can be extended by up to another 90 days in certain situations.
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^For fixed rate loans, additional repayments and redraw at no extra cost are limited to $20,000 during the fixed term. In limited circumstances, Ubank can cancel or suspend your right of redraw.
*85%-90% LVR is available for new purchase loans with loan terms up to 30 years repaying P&I. Max loan amount is $2M per application.
Products issued by Ubank, part of NAB. Credit criteria apply. TMDs at ubank.com.au
Image: @Drazen Zigic via Canva.com