Welcome to part 3 of our Buy Property in Australia from Overseas Series.
Mortgage pre-approval is important for any home buyer looking to purchase Australian property. Pre-approval is the process of finding out just how much your lender believes you can afford to mortgage. This lets you know if the properties you’re looking at are out of your budget, or if you can afford more property than -you originally thought.
If you haven’t started looking at Australian real estate, getting pre-approval first will help your real estate agent determine exactly which properties they should show you based on your mortgage pre-approval. It will also help you avoid having a loan application rejected because the requested loan amount is too high for your income. Here are some other reasons mortgage pre-approval is so important.
Get Taken Seriously with a Pre-Approval
Real estate agents rely on dedicated buyers and sellers in order to make a living doing what they love. As a buyer, pre-approval shows that you’re serious about making a purchase and give an agent the confidence they need to spend time researching and showing properties to you. A buyer that doesn’t get pre-approval, while still able to get good service from an agent, may not be taken as seriously as a buyer willing to go through the pre-approval process before looking at properties.
Pre-Approval Gives You an Edge when Submitting an Offer
Not every buyer will take the advice to get pre-approval before submitting an offer on a home or commercial property. A top notch property usually has numerous offers coming in at one time, and the property owners will feel more confident awarding the offer to a preapproved buyer over a buyer who still needs to find out if they can secure the financing needed to buy the property. This will help you avoid losing out on a home or business location you really love simply because the seller isn’t confident that you will be able to afford the property.
Temporarily Lock In the Interest Rate
When you apply for a home loan, you’ll get the current interest rate applied to the loan. If you didn’t apply for pre-approval, you may end up with a higher interest rate than if you’d gotten preapproved. Interest rates change regularly, but when you apply for pre-approval you are approved at a certain interest rate and it’s locked in for a set amount of time. Each lender is different, but you may get the rate locked in anywhere from 30-90 days, giving you time to locate and put a bid in on a property.
Next week we will address the important topic of Foreign Investments Review Board Info. Please come back and visit or feel free to subscribe to Real Estate Colum to get the info delivered to you.