Home buyers know that getting finance (or mortgage) approval is important before looking for your dream home. But what is finance approval and can you rely on it?
Lenders will look at your financial information such as what you earn and your savings and decide if they are in theory willing to lend to you, and, advise you of the amount they will lend. At this stage you get a Pre Approval certificate and think yes! I’m ready to look at houses in a certain price range.
So, when you are making an offer on a property do you still need a finance condition? The answer is usually YES because a pre-approval is always loaded with conditions. A big one is that the property you want to buy has to be suitable to the bank.
Why do I need a finance condition when I have been pre-approved?
Banks view different property types as more or less risky. Eg. Apartments can be treated differently to a stand alone house. Properties with unconsented works will be of concern to the bank (usually nothing we can’t solve, though). Banks lend less on empty sections.
We always ask buyers: Do you have an unconditional offer of finance for THIS property? What are the conditions in your finance pre-approval? (eg, valuation). How can we start getting those conditions off your finance approval so that you have a solid reliable offer of finance?
Signing a contract to purchase a house without a confirmed offer of finance could cause you a major headache and loss of your deposit! We are here to save you those headaches.
Talk to Hayman Lawyers for peace of mind legal solutions.