BEING PREPARED

23 March 2016
There has been a surge in buyers coming back in to the market with a larger number of real estate transactions.  With more competition amongst Buyers there is more pressure for them to strengthen their offers.  Stronger offers are not necessarily about a higher purchase price.  In fact they can be more about the conditions attached to the offer.  
 
The Finance condition on a sale & purchase agreement can be strengthened by having a pre-approved loan from a lender.  Most of us need some sort of loan in order to settle a purchase and the loan is usually going to be secured by the property that we are purchasing.  If you are able to tell your Agent and your Vendor that you already have your finance approved then your offer is far stronger than someone who may have a higher Purchase price but has not arranged their finance and therefore may not necessarily be a sure bet to get their finance approved.
 
Today’s market differs because of the changes in lending criteria.  Many people that qualified for loans previously are struggling to get their loan approved today.  Getting a pre-approved loan can address any complications in your application.  
 
A preapproved loan can also clarify exactly what a buyer’s maximum loan capacity is.  It is recommended that this information be obtained from an independent source such as a mortgage broker who represent many different lenders and as such can offer a wider range of options.  The best time to visit your Mortgage Broker is before you go looking for a property.  There’s nothing worse than looking at a house, falling in love with it only to find that you would be unable to afford it.
 
 
While pre-approval can sort out what your maximum borrowing ability,  the approval will still be subject to the lender’s approving the property that you wish to purchase.  If they don’t like the property that you are purchasing they can pull the loan approval.  You can remove that need for a finance clause by getting the lender to sign off the sale & purchase agreement before you sign it.  Alternatively you could make your offer subject to finance but have a very short finance date on it eg 1 – 2 working days.  This allows time to get the agreement to the lender and for them to sign off the property.  With the short finance date it still makes the offer very strong.  
 
Pre-approved home loans are an essential factor on today’s  market when you are considering purchasing a property.  It can empower you so that you are in the strongest possible position to get the best possible chance of securing your new home at the best possible terms.

Published In Whakatane Beacon

This post was written by

Trish Marsden - who has written 96 posts

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