Last month the Real Estate Buyers Agents Association of Australia announced that throughout Spring demand for property in Melbourne is expected to outstrip supply. This will no doubt place further pressure on prices.
In a competitive market, someone who sees a property they want to buy risks missing out if they don't know their limits or leaves the loan process too late.
Lenders receive more mortgage applications during the spring property season which can sometimes cause delays in the home loan approval process. In addition, some lenders have recently tightened their lending criteria which means that an approval you received a year ago may not stand now.
Our advice for house hunters is to organise finance well ahead of time so you can house hunt with confidence.
Here are our tips for a smooth pre-approval process:
1. Gather your financial information
To understand how much you can borrow, and therefore what you can afford to buy, you need to give the lender a comprehensive picture of your finances. This includes your income and assets, debts and living expenses. You will need to supply evidence including pay slips, credit card statements and loan statements from existing loans.
2. Speak to us
Make an appointment to speak to us. We will help you every step of the way and use the information you have gathered to calculate an approximate borrowing figure. We will then complete paperwork and submit your application on your behalf.
3. Receive conditional approval
Assuming your credit rating allows you to borrow, you will receive conditional approval from the lender. This will show how much can be borrowed, and how long the approval lasts, usually for 90 days. It is important to know that this is an indication, not a guarantee, of the amount you can borrow. Using the conditional approval you can determine how much you are able spend on a property. Factor in your deposit and expenses such as conveyancing fees, stamp duty and so on.
What happens next?
Once you’ve put in an offer on a house – whether at auction or a private sale – you’ll need to get full approval on a loan. Contact us with details of the property, and we will work through the home loan application process with you.