What’s Is A Loan Pre-Approval?
Basically, this means that a lender will have confirmed your eligibility for a loan, as well the general boundaries and size of the loan in question WITHOUT having given you the final approval yet. These loans usually pertain to the purchase of homes.
This can be profoundly helpful in determining the scope of a potential purchase, that is, how much you can afford to spend, as well as boosting confidence in auctions by virtue of it giving you a definite cap on your bidding.
Pros?
Many of the benefits of a loan pre-approval speak for themselves. To begin with, however, is the fact of the pre-approval protecting you from over-expenditure, and commitment to sums which can not be met. In the same vein, having a pre-approval can help you to narrow own your options in terms of what’s affordable.
The fact of a having a pre-approval may also make one a more attractive buyer, because from the seller’s perspective, one would appear to be a more serious, well-equipped, and competitive buyer if armed with a loan pre-approval.
Cons?
There is no real drawback to having a loan pre-approval, although, there are certain facts and factors that one should keep in mind when obtaining one.
- Credit rating – When you apply for a pre-approval, it will appear on your credit score as being a ‘loan enquiry’. Whilst this is fine once or twice, If one takes out many loan enquiries in a short period of time, it will severely harm one’s credit rating and damage one’s ability to borrow money in the future. It is therefore advised to only seek pre-approval ONCE and from ONE SOURCE, preferably a finance brokerage, such as Natloans.
- Subject to change – Unfortunately, in some cases, having a loan pre-approval does not necessarily mean that one will have a guaranteed loan. This is because multiple factors can shift the lender’s willingness to give out the loan, such as; changes on regulations, change in the property’s condition or value, and changes to your own, personal conditions of finance.
These factors, however, are often part and parcel of any sort of financial investment.
How Can I Get a Loan Pre-Approval?
In order to get a pre-approval loan, one must basically fulfil all the requirements that come along with a regular loan approval. These vary case-by-case as it respects the specifics, but in general, this calls for a clean credit history, healthy and stable income, and willingness to follow through.
The best way to go about getting a pre-approval loan is through a finance broker rather than directly through a lender. This is because a broker will be able to sift through all the options and get all the leg-work done for you, saving you the effort and applying expertise to ensure that you can get the best deal possible.
Even better, when a broker inquires as to your ability to get a pre-approval, it WILL NOT SHOW UP ON YOUR CREDIT HISTORY, which means that if you choose this route, a broker can search and apply for you as much as you need, WITHOUT DOING ANY DAMAGE TO YOUR CREDIT RATING. This is because it is classified as an agent inquiry rather than a client inquiry.
Natloans has been getting loan pre-approvals done for our customers for nearly two decades, and our veteran team of finance brokers are equipped with the knowledge, experience and capability needed to ensure that you will be able to get hold of the approval and security you need, to take ownership of the home and property that you deserve.
So what are you waiting for? Need security and pre-approval? Have your eyes on a property and need to budget? Call Nations today!