Getting a pre approval: How to increase your auction success rate?
Purchasing property at auction is an increasingly popular story across Australia, with more and more vendors choosing this avenue as their preferred method of sale. Of course, there are a wide range of things to be aware of when it comes to attending an auction and buying real estate in Surfers Paradise. However, the most important part is to organise your finances nice and early.
You don't want to be the one who misses out on sealing the deal simply because you didn't have your home loan and financial details organised beforehand. Auctions are a fast-paced environment of competition, with contracts often signed immediately after the bidding has finished and the auction has come to an end. Therefore, it's imperative to have your finances ready to go as soon as the hammer hits.
However, it can be difficult to know exactly how much you'll need at any given moment. Because of the fluctuating nature of prices in auctions, organising a home loan pre approval is the best way to go about securing finance and working towards your property goals.
What is a home loan pre approval?
After deciding to buy property and starting your search through the market, getting your finances is essential. A pre approval from a lender will give you exactly this. But you may be wondering; what is a home loan pre approval?
A home loan pre approval is a document that states a lenders has confirmed their commitment to a certain amount of money for real estate purposes. However, unlike a property mortgage, this amount is unattached to any single property at the time of issuing, which means you're free to investigate the market and find the right home for your funds.
This acts as a placeholder for a regular approval, which can make the property search much easier – knowing that you have a certain amount of money committed to your needs, whatever you decide to pursue.
Why get a home loan pre approval?
First and foremost, having the knowledge that there is a certain amount of money available for you to access in the future for property is often a huge weight off potential buyers' shoulders. Not having to worry about where the funding is coming from means focusing more on the type of home you're interested in purchasing.
When you apply for a home loan pre approval, you'll need to supply your lender with a range of different information. This includes things like the size of your deposit, what the loan is for, your income – as well as your partners – the number of dependants living under you, and aspects along a similar vein in order to assess your risk and provide you with an accurate figure of what you will be able to borrow.
Furthermore, pre approvals are valid for up to three months. This gives you and your family plenty of time to investigate the market and find a suitable home, without the looming presence of a nearby time limit for your finances.
Home loan pre approvals don't cost customers anything, so you'll be able to get a relatively accurate gauge of your borrowing power without any expense on your behalf. All of these aspects make getting a home loan pre approval a beneficial process to go through to inform your auction decisions.
With the Ray White Surfers Paradise auction phenomena, The Event, coming up at the beginning of next year, there will be a wide range of opportunities for people to secure their own home loan pre approvals and make moves into the local community in the near future.