GET AHEAD WITH PRE-AP­PROVAL

Highfields' Own - - REAL ESTATE - MORT­GAGE CHOICE

Are you in the mar­ket for a prop­erty?

While buy­ing a new home is an ex­cit­ing ex­pe­ri­ence, it can also prove very stress­ful, es­pe­cially if you are com­pet­ing for your dream home against a lot of other po­ten­tial buy­ers.

Thank­fully, there are ways for you to get your­self ahead of the pack and lift your chances of se­cur­ing that dream prop­erty — and it all starts with loan pre-ap­proval.

Loan pre-ap­proval pro­vides you with a con­di­tional ap­proval of a loan amount.

Gen­er­ally speak­ing, it’s based on an as­sess­ment of your in­di­vid­ual cir­cum­stances, needs and abil­ity to re­pay the loan.

A loan pre-ap­proval will pro­vide you with some clar­ity around the amount you can bor­row, and there­fore, what you may be able to spend on a prop­erty.

As a re­sult, it will stop you from look­ing at prop­er­ties that are well out­side of your price range.

Fur­ther, loan pre-ap­proval will put you in a stronger po­si­tion to ne­go­ti­ate with a ven­dor or bid at auc­tion.

It’s im­por­tant to keep in mind that pre-ap­provals are usu­ally a limited-time of­fer — usu­ally for a pe­riod of three to six months, de­pend­ing on the lender.

In or­der to help your­self pre­pare for pre-ap­proval, there are a few things you should do. Or­gan­ise your de­posit: As a home buyer, you gen­er­ally need a de­posit of at least five per cent of the pur­chase price, plus up­front costs.

You will also need to show ev­i­dence of a gen­uine sav­ings plan, such as bank state­ments that il­lus­trate a sav­ings strat­egy for at least three and up to six con­sec­u­tive months.

Pleas­ingly, some len­ders now con­sider rent pay­ments as ev­i­dence of gen­uine sav­ings.

Check your credit his­tory: Grey ar­eas in your credit his­tory, such as bill de­faults and/or prior loan/credit ap­pli­ca­tions can af­fect your loan pre-ap­proval ap­pli­ca­tion.

It’s im­por­tant to re­solve any credit im­pair­ments with the rel­e­vant credit provider be­fore you ap­ply for fi­nance.

Your lo­cal bro­ker can help you iden­tify what credit de­faults (if any) that you may have and work with you to rec­tify the sit­u­a­tion.

Pre­pare your pa­per­work: Gather ev­i­dence of your em­ploy­ment, in­come, as­sets, li­a­bil­i­ties and ex­penses.

You’ll also need to pro­vide your driver’s li­cense or other ID, re­cent pay slips, tax re­turns and bank state­ments.

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