What is loan pre-approval and how do I get one?
Getting a loan pre-approval can be a really smart step toward securing your dream home. Having a broker to help you along the way can make the journey far less stressful.
Having a loan pre-approval in your hands as a buyer on Auction Day is an absolute must! In fact, it’s becoming quite common for real estate agents to not accept an offer from a prospective buyer unless they have one. Tightening bank credit conditions have definitely changed the landscape and a pre-approval gives the other parties confidence in you.
But. Be warned, there are pre-approvals and there are real pre-approvals.
Let’s briefly discuss the first sort – it isn’t worth the paper it is written on! “Why is that?” I hear you ask. It’s because the application has not been assessed by the bank’s credit department, these are just a sales technique employed by the banks to give customers an on the spot approval. These can be spotted a mile away as they will have all sorts of ‘conditions’ attached. And the problem is that these are more likely to be declined once they go to full assessment.
REAL loan pre-approvals
A real pre-approval will require a full application to the bank.
The real type of pre-approval has been fully assessed by the bank credit team (including mortgage insurers, if applicable) and will only have a small number of conditions attached. The main one being that a suitable property can be found that is acceptable to the bank (valuation).
Pivotal Financial is the financial arm of RE/MAX Australia. Pivotal deals with loans, RE/MAX with the home sale. They both serve a common client and can strengthen their offering to their client as they are connected by a mutually beneficial partnership.