Day 17.
Let's talk about pre approvals and pre qualifications.
So if you're looking to buy a property in the next six months and you're pretty
sure you're going to put in the work and the effort required to do it,
then you really do want to be thinking about getting a pre-approval
because it helps lock in your understanding of what's
required for mortgage application and it's going to help bring to the surface
if there's going to be any issues that might be,
if there might be to see unless you're submitting formal documentation.
So if you're really sure the next six months are going to buy
a property, then I would recommend that you go through the pre-approval process.
It does make sense to get in front of doing the pre-approval documents
and the application if you're going to especially work through a mortgage advisor
like in the couple of weeks or even a month or two before
you're actually starting to seriously look at properties.
And if you are seriously looking at properties,
then you really want to get that pre-approval process underway,
especially because if you find something that is really popular,
then you don't want to be saying that you need a couple of weeks for finance.
If you can go unconditional because you get your finance sorted.
It does give you an advantage over other people.
So how you get a pre-approval,
you can go to your existing bank but if you're working with a mortgage
advisor, they can help you identify which banks are the best options for you
and which which banks are given the best approvals based on your circumstances.
You know, some banks are going to lend
you a lot more money than others based on your individual situation.
So it's good for you to have an insider, like a mortgage advisor showing you
which bank is going to be doing that for you.
The key thing, I guess, is without without having a specific property
under contract they are subject to change.
So pre-approval is just a bit of paper.
It's going to have conditions.
There's going to be things that you need to do to to qualify for that finance.
It's a strong formal indication that the bank might lend you the money.
So there's a lot of what ifs but it's still it's going to help
with any new build products or with agents,
and it's going to help your confidence level to feel that you can go out there
and start shopping.
Now, if you
are in a strong financial position or you've already bought property before,
then you might not necessarily need a pre-approval.
Pre qualification might be perfectly fine.
And especially if you're not
if you're not at least 80% sure that you're going to buy a property
in the next six months, you probably don't need a pre-approval.
What you really need is a pre-qualification
of your borrowing power and a mortgage adviser that's worth
their crust is going to be able to tell you what you're borrowing
power is based on very simple information around income, expenses,
age, dependents, cars, things like that shouldn't take too long.
So pre-approval might take you a couple of weeks
to get that information back from the advisor and the banks.
Usually would only need one bank to give you the approval.
Pre qualification, that can happen within a day, if not hours.
If the advisor is good at what they're doing,
they can give you a very strong indication across different lenders
what finance options you've got and you can out.
You can start shopping for property with with a lot more confidence.
Having spreadsheets and having a contact person
you can talk to about getting that property under contract and
getting the finance arranged when the time is right.
Pre-qualification, pre-approval, just remember that without a sale
and purchase agreement, there's no guarantees
and any changes in your situation like job kids debts
like any major situation, the lenders going to want to know it
and that might bring your pre-approval down might bring it up
if you have a pay rise It's just important to keep disclosing the key information
to the banks and the advisors to make sure you're getting accurate information.
And if you don't disclose to get accurate approvals, then you probably will get
found out eventually it's going to put a black mark against your name.
So what's the cost of getting a pre-qualification?
There's no cost for that.
It's just the advisers running some numbers.
If you get a pre-approval through your bank, there's no real cost for that.
You're kind of giving up the option of seeing which other lenders
are going to do,
and you might end up getting not as good rates later on or not as good advice.
So some mortgage advisors do have pre-approval costs.
At the
time that I'm doing this video, if we do a pre-approval for you
and you use it within six months, then there's no cost
because we're going to get paid by the lender.
Generally speaking, what we say to people that want to get pre-approval
is that if you don't use this pre-approval within six months, we do have a $250
to $450 administration charge because it's a lot of work for us,
and that's just to discourage people from getting pre-approved
unless they're really serious about buying in the next six months.
So in the past I know the banks got pretty annoyed about
it is a lot of people were getting pre approvals even when they were not serious
and especially from multiple lenders.
The advisors don't generally submit your application to multiple banks
because those banks figure it out pretty quick that
if you submit to four banks and only one bank gets the deal,
those banks that didn't get the deal figure it out from you know,
they figure out those advisers real quick and start working with them.
And it's the same if you go all around town
going to each different bank yourself trying to get pre approvals,
those credit checks are going to show up on your on your on your report
and you're just wasting a lot of your time when you don't need to.
So don't don't feel like you've got to go to every bank figuring out
all of this stuff yourself.
Just find a mortgage advisor you trust,
get a pre-approval from where you need it and only get it when you need it.
So any questions about pre approvals or figuring out borrowing power,
let us know below.