Pre-approval is an important step for home buyers.

Here we explain the process for getting conditional approval for your mortgage.

Getting conditional approval for your home loan allows you to look – and enquire – with confidence, and it helps narrow your options.

Here are some commonly asked questions about conditional approval, that important first step in the home buying journey.

1. Do I need conditional approval?

Most people at an open house aren’t looking to buy that particular house.

They’re doing their homework, getting a sense of the market. They’re dipping a toe in (or just being nosey!). But with loan conditional approval, you’re in a different camp. You’re the real deal. You’re showing real estate agents and vendors you’re serious and someone to negotiate with.

Conditional approval also keeps your feet on the ground. You know exactly how much you can afford—and don’t waste time drooling over houses outside your budget.

2. Pre-approval, conditional approval or approval-in-principle?

Different lenders use different terms—pre-approval, approval-in-principle and conditional approval—to describe much the same thing. It can be confusing. But think of it like this:

• It’s an enquiry to establish your financial position.

• It’s an indication (not a guarantee) from the bank as to how much you can borrow.

3. When should you apply for conditional approval?

Homebuyers often apply for conditional approval once they’ve done some initial research:

• Worked out borrowing capacity using various financial tools and calculators

• Worked out how much you can afford to repay

• Studied different types of home loans, and you may have looked at the local property market and suburb you’re interested in.

Don’t apply too early—our finance partner’s conditional approval is valid for 90 days from application, but you can apply again.

4. How do you apply?

Contact us @ propertyloans@realrenta.com and we will arrange for a lending specialist from our trusted finance partner to contact you.

5. What does the conditional approval process typically involve?

Your lender will look at how much you owe (loans, credit cards etc.), and how much you own (assets including cars, shares etc.).

Typically, your lender will perform a credit check on you with an external credit bureau. At this stage, your lender will most likely want some information about the property you are wishing to obtain a loan for ( postcode, type of dwelling etc.).

They’ll also want to know how much you earn (your wages/salary), and what your expenses typically are (food, utility bills, rent etc.).

Marlene Liontis & Jason Gwerder
Wednesday, 17 October 2018

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