Pre-Approval: your first step to opening your new front door
In lending, the Pre-Approval is the pre-qualification for a loan. It’s a formal statement acknowledging how much the bank has agreed to lend you, based on the review of your financial situation. Sounds pretty important right?
YES, it is! And here are a few reasons why being ‘pre-approved’ is your first step to opening your new front door.
Home-ownership must start with pre-approval
Along the home-ownership journey there are many steps to sealing the deal. When you think about financing your new home, you may skim over Pre-approval thinking ‘well formal approval from the bank is what actually matters’. Whilst this of course is true, there is only one way to get there and it starts with pre-approval.
It’s the first stage used to determine your borrowing capacity. Without knowing what you can borrow, you won’t know what properties are in your price range; so it’s a pretty important place to start.
Turns Possibility Into Reality
Knowing where you stand with the bank is a vital part of turning the possibility of homeownership into a reality. When the bank can assess your financial situation, they can begin looking at concrete finance options for you. Even if you don’t think you have the best financial history, the point of pre-approval is the assessment of what is possible. It’s a step that evaluates what may need addressing in order to get you to formal approval for your loan.
So instead of your new home being an uncertain dream, you could be setting an established timeline for the construction of your very own new-build.
Gives you Confidence as a buyer
Pre-approval helps you understand how much you can borrow and think about how much you should borrow. Buying a home is probably the biggest financial transaction you will ever make, and it can be overwhelming. Pre-approval gives you the confidence to focus on packages that are within your budget, therefore you know where you stand from the get go.
Puts you at the forefront of the Developer mind
In order to secure a block, developers will require an ‘Expression Of Interest’ form to be completed, accompanied with a pre-approval.
Developers are looking for the security of serious buyers who can prove their ability to buy. Pre-approval provides this assurance to the developer, which will catch their attention when sifting through hundreds of applications for a block – especially in a market like today.
In this way pre-approval will help you to secure your ideal block as well as enjoy other benefits such as early or exclusive access to new land releases. It’s even been known that developers will look for a block for an applicant with pre-approval!
Strengthens Your Application
As mentioned, the competition is strong when the market is rising, therefore making your application as compelling as possible, to stand out from the crowd, is vital. Having a finance plan, good communication with your bank and a firm understanding of what you need to do to achieve your mortgage with your pre-approval, demonstrates your commitment to buying.
With the strength pre-approval gives your application, you should feel confident knowing you are taking all the necessary requirements to secure that dream new-build.
Ensures a Smoother Journey
As pre-approval dives into your finances, it’s a great opportunity to iron out any creases that may need addressing that could cause problems down the road. It’s a simple step that can take away a considerable amount of unnecessary stress. If you can do anything to make this process easier, pre-approval is something to get done straight away.
It really is as easy as 1, 2, 3…
With the Balfour finance team it really is that easy…
- On your Balfour Homes app, you submit the relevant documents required for pre-approval
- The Balfour finance team assesses your situation, comes up with a pre-approval plan to get you to where you need to be financially and find you a suitable loan from the inventory of 30+ lenders.
- Once everything gets the green light, Pre-Approval is granted!