3 reasons why first home buyers need finance pre-approval

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Are you about to start searching for your first home in Auckland? Before you do, it’s a great idea to arrange conditional finance pre-approval.

This is essentially an indication from your bank or lender that they will loan you a certain amount to go towards purchasing a property, provided it meets their criteria and circumstances don’t change.

Here are three reasons why sorting pre-approval early is so important.

 

1. An indication of what you can afford

When you’re hunting for your first home, it’s easy to get carried away. Another $100,000 might get you a property in your dream suburb, or perhaps a fourth room and a bigger back yard.

These possibilities may be exciting but it’s important to know what you can realistically afford before you start searching, particularly if you’re going to buy at auction. Finance pre-approval will give you a price range to work within so that you don’t waste your time looking at properties that aren’t within your reach.

 

2. Let vendors and real estate agents know you’re serious

When showing interest in a property, the real estate agent or vendor will often ask where you’re at with finance. Telling them you’ve got pre-approval will help ensure they take you seriously as a buyer.

What’s more, when it comes time to make an offer or bid at auction, you can do so without worrying whether or not your bank or lender will loan you what you need to go through with the purchase. This is particularly important when buying at auction because if you make the winning bid, you’re legally required to purchase the property and may lose your deposit if you can’t secure finance.

 

3.Speed up the formal loan approval

When you’re ready to make an offer and you need to secure finance approval, it’s usually a lot easier and quicker if you’ve already sorted pre-approval.

If you’re about to start searching for property make sure you get off on the right foot. Get in touch with the team here at Money Empire for help organising your finance pre-approval so that you can hunt for homes with confidence.

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