Securing a pre-approval: Home buying success guide
Securing your dream property doesn’t have to be complicated. With Buyvest as your local mortgage adviser, we will guide you every step of the way to make the process simple and easy for you. With over a decade of experience, Buyvest will ensure that every stage of your financial planning for property investment is navigated with precision and care.
First chat with Buyvest
Your journey begins with just a simple phone call where we'll talk about your current circumstances, how much you earn, any debts you have, and what you're hoping to achieve with your property. We'll then send you an email listing everything you’ll need for our next meeting, and having these ready means we can focus more on your property dreams and less on paperwork. At Buyvest, we’re dedicated to understanding your unique needs and laying a solid foundation for your property journey.
Meeting with a mortgage expert
During your initial meeting with one of our mortgage professionals, your property goals take centre stage. We’ll listen attentively to your requirements, guiding you through loan options that align perfectly with your situation. You’ll be presented with a range of choices in detail so you can make an informed decision, and once you’re happy with your loan selection, we will then move forward with the loan application process.
Applying for your loan
We will help you fill in all the forms and explain what other information we need from you to help us apply for your home loan with a lender. This collaborative effort ensures every detail is accurately handled. We will provide a Credit Guide, this contains important information about the us, our credit licensing details, and our dispute resolution process. Then we will provide a home loan Credit Proposal, this is a comprehensive assessment of a your financial situation and suitability for the loan, ensuring responsible lending practices and preventing potential hardship for you and your co-borrowers. We will send you these documents electronically to make signing easy, straightforward, and secure.
Bank checks your application
The lender’s assessment is a crucial step where they review your application against their credit requirements. This includes verifying your income, employment status, and conducting a credit check. The bank will also require you to sign a Loan application form before they will assess your application, where possible we will also send you this document electronically to make signing easy, straightforward, and secure. We will keep in touch with you every step of the way. Depending on the lender, this can take anywhere from a day to two weeks.
Conditional approval
A conditional approval is when the lender agrees to lend you money based on a preliminary assessment and meeting certain requirements. It isn’t a formal approval or commitment. Once we receive conditional approval from the lender, we will then take you through the next steps. This approval may list certain conditions that need addressing before an unconditional approval is granted. For many, property valuation is a common condition, which the lender arranges once you provide them with a signed and dated copy of the contract of sale.
Property valuation
The lender will want to know how much the property you are purchasing is worth. They will organise this valuation, which can take a few days. The three main valuation types are: Bank Computer Valuation, which is an automated approach using recent local sales data. Desktop Valuation is a remote analysis based on available photos and information. Shortform Valuation involves an in-person assessment by a professional valuer.
Conveyancer to review contract of sale
Have your conveyancer check the contract of sale prior to exchanging contracts for any unfavourable terms or conditions. This review should include checking for caveats, which are warnings or limitations on the property, and ensuring that all inclusions, such as fixtures and fittings, are clearly listed. The conveyancer will also look for any unusual clauses or conditions that could affect your ownership or use of the property. This thorough review helps prevent any surprises or legal issues after the contract is signed.
Organise building, pest, and strata report
Request your conveyancer to organise these reports during the cooling-off period. Building and pest reports are essential in identifying any structural issues or infestations that could affect the property's value or your safety. A strata report is crucial for apartments, villas, or townhouses, as it provides insight into the building's financial health, maintenance history, and any upcoming costs. These reports ensure you are fully informed about the property's condition and any potential risks, allowing you to make a confident and secure purchase.
Unconditional approval
This is a big moment! Unconditional approval means the lender is completely happy with everything and the loan is formally approved. We'll let you know when this happens and then the lender will send out the official loan documents.
Going through the loan documents
These documents include the loan offer and other important legal paperwork. It's a good idea to review these with our advisers or your own legal expert, like a conveyancer. If it's just a loan refinance or a small loan increase, we can help you understand these documents.
Final Step: Settlement
The last step of the process is settlement. Once you’ve signed all the documents and sent them back to us, we’ll work out the final details. We’ll coordinate with your conveyancer, who’ll handle booking the date of settlement. Our team at Buyvest will ensure everything goes smoothly.
Key points to remember
Throughout this journey, remember, Buyvest is here to guide you every step of the way. With over a decade of experience, we’ll make sure your path to owning a property is as smooth as possible.
Understanding the common queries related to property loans can help you make informed decisions.
Here’s how Buyvest addresses the top searched questions:
Loan pre-approval process: Buyvest ensures that the pre-approval process is smooth, providing you with an accurate estimate of your borrowing capacity. It’s the first step in understanding how much you can afford to borrow.
Choosing the right loan: With an array of loan options available, Buyvest assists in selecting the one that best fits your financial situation and goals, considering factors like interest rates, loan features, and repayment flexibility.
Interest rates and their impact: Interest rates significantly affect your loan repayments. Buyvest helps you understand these impacts and choose between fixed and variable rate options.
Property valuation and its importance: Valuation is crucial in determining the loan amount. Buyvest will guide you through this process, ensuring that your property’s value is accurately assessed.
Loan documentation and legalities: Understanding loan documentation can be complex. Buyvest will break this down for you so we can ensure you are well-informed about the terms and conditions of your loan.
Refinancing options: If you’re considering refinancing, Buyvest will explore the best options for you, balancing your current financial needs with future goals.
Loan application mistakes to avoid: Common pitfalls in loan applications are easily avoided with Buyvest’s guidance, ensuring a smooth application process.
Impact of credit score on loan approval: Your credit score plays a crucial role in loan approval. Buyvest will advise on how to maintain a healthy credit score or improve it if necessary.
Mortgage insurance: Understanding when mortgage insurance is needed and its impact on your loan is another area where Buyvest provides expert advice.
Loan settlement process: The final step of your loan journey, the settlement process is efficiently managed with Buyvest, ensuring all legal and financial formalities are completed without hassle.
In conclusion, whether you’re embarking on your first property investment or looking to expand your portfolio, Buyvest ensures that your journey is well-planned, strategic, and aligned with your financial aspirations.
Frequently asked questions about home loan pre-approval
How long does pre-approval last?
Most pre-approvals are valid for 3 months, depending on the lender. If your pre-approval expires before you find a property, you can usually apply for an extension or renewal, though you may need to provide updated financial information.
Does applying for pre-approval affect my credit score?
Yes, most lenders will conduct a credit check as part of the pre-approval process, which creates an inquiry on your credit file. Multiple inquiries in a short period can impact your credit score, so it's best to be selective about where you apply. Working with a Buyvest can help minimize multiple credit checks.
Can pre-approval be declined?
Yes, pre-approval can be declined for various reasons, including insufficient income, high existing debts, poor credit history, or unstable employment. If declined, ask for specific feedback so you can address the issues before reapplying.
Is pre-approval a guarantee that my loan will be approved?
No, pre-approval is not a guarantee of final approval. The lender still needs to assess the property you intend to purchase and verify all the information you've provided. Changes in your financial situation or issues with the property could affect final approval.
Should I get pre-approval before looking at properties?
While not mandatory, getting pre-approval before serious property hunting is highly recommended. It helps you understand your budget, strengthens your position as a buyer, and prevents disappointment if you find a property you love but can't finance.
Can I get pre-approved with multiple lenders?
Yes, you can apply for pre-approval with multiple lenders but be aware that each application typically involves a credit check. Working with a mortgage broker who can assess multiple lenders' criteria without multiple credit checks is often a better approach.
What happens if the property valuation comes in lower than expected?
If the valuation is lower than the purchase price, you have several options:
Negotiate with the seller for a lower price
Provide a larger deposit to maintain the same loan-to-value ratio
Seek a second valuation if you believe the first was inaccurate
Look for a different lender who might value the property differently
Consider whether to proceed with the purchase given the valuation
Can I change lenders after receiving pre-approval?
Yes, you're not obligated to proceed with the lender who provided pre-approval. However, you'll need to go through the pre-approval process again with the new lender, which takes additional time.
Does pre-approval cost anything?
Many lenders offer free pre-approval services, while others may charge an application fee. These fees are sometimes refundable if you proceed with the loan. Buyvest provides pre-approval services at no cost to the borrower.
What if my financial situation changes after pre-approval?
You should inform your lender or mortgage broker immediately about any significant changes to your financial situation after receiving pre-approval. Changes such as switching jobs, taking on new debt, or experiencing income fluctuations could affect your final approval.
Next Steps After Reading This Guide
With proper preparation and professional guidance, securing pre-approval can be a smooth and empowering step toward achieving your homeownership dreams.
Remember that pre-approval is not just a procedural formality - it's a valuable tool that provides clarity, confidence, and competitive advantage in your property search. By understanding and optimizing the pre-approval process, you're setting yourself up for success in one of life's most significant financial decisions.
Ready to start your property journey? Reach out to Buyvest today and take the first step towards your property dreams. As your local mortgage broker, Buyvest will ensure that the path to purchasing a property is as clear and manageable as possible.
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Important stuff:
Please note that the views and opinions expressed in this post are general information only, and this is not financial advice.
Any advice and information is provided by Buyvest Pty Ltd ABN 91 684 841 496, Australia Credit Licence No. 567392 and is general in nature, for educational purposes only and is not intended to constitute specialist or personal advice. This website has been prepared without considering your objectives, financial situation or needs. Therefore, consider the appropriateness of the advice for your situation and needs before taking any action. It should not be relied upon to enter into any legal or financial commitments. Specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy. If any financial product has been mentioned, you should obtain and read a copy of the relevant Product Disclosure Statement and consider the information contained within that Statement concerning your circumstances before deciding whether to acquire the product. You can obtain a copy of the PDS by emailing hello@buyvest.com.au. If you want to change your financial circumstances, such as applying for a loan, all loan applications are subject to credit approval.
All information on this website is subject to change without notice.
