Conditions to approve for loan
Once you start thinking about buying a property, also known as pre-approval, it is worth considering, regardless of how much you plan to borrow from it.
Conditional approval is similar to full approval of the financing except that the property you intend to buy has not yet been determined. It provides clear guidance on how much money you have to work with. Certain conditions must usually be met before full funding is granted.
Your mortgage advisor on the Build ME will organize a conditional approval so that the property you will purchase or bid at an auction can be negotiated confidently, knowing your purchasing power. It is obvious to get caught up in a thrilling auction – conditional approval allows you to know how your repayments will impact additional offers.
The advantages of obtaining conditional home loan approval:
There are various types of pre-approval home loans ranging from simple telephone pre-approvals to written pre-approvals. Many of these are only indications of what the bank is prepared to lend. It would help if you had a written pre-authorization to ensure your borrowing capacity. You may have to pay specific application fees, but it is worth the security, and then you will be free to negotiate with trust or offer at auction.
Secure a valuation
Notwithstanding its name, a formal pre-approval still has certain conditions to be fulfilled before it is fully approved. A valuation is the most basic requirement, so it makes sense to obtain a formal valuation through your lender before buying or signing a contract.