When it comes to buying a property, many people get caught up in the excitement of looking at potential homes but neglect the crucial task of arranging finance. This can put them in a weak negotiating position when it comes to both the property and the loan. It’s important to remember that organising your finances should be a top priority, as gaining pre-approval from a lender will give you an idea of how much you can afford to borrow.
Before you start your property search, you need to determine if you’re eligible to borrow money from a lender. Your ability to repay the loan will be assessed, so it’s important to ensure your credit history and deposit are up to scratch. Arranging finance before finding your ideal property will put you in a strong position when it comes time to make an offer. This will show the seller and estate agent that you are a serious and reliable applicant who is well-prepared.
Having conditional loan approval in place will give the seller peace of mind that your financing won’t fall through, and it will also demonstrate that you are capable of completing the sale with steadfast funding. This will help put you at the top of a potentially competitive list of applicants. On the other hand, if you find and secure a property without having your loan pre-approved by a lender, you risk forfeiting your initial deposit if you can’t secure financing.
Putting off your home loan application until the last minute can also leave you with less time to find the most suitable loan and have it approved before settlement. Arranging finance as an afterthought can add immense pressure to the process of shopping around for the right loan and gathering the necessary paperwork to prove that you can service the loan. It’s important not to rush this process and to give yourself enough time to find the right loan with the best terms and conditions.
In conclusion, arranging finance before looking for a property is essential in home buying. It provides confidence about how much you can afford to borrow and puts you in a strong negotiating position when making an offer. It also gives the seller peace of mind that your financing will not fall through, making your application a more attractive prospect.
As daunting as it may seem to buy your first home or your second, or apply for a home loan we’re here to guide you through the process so you feel informed and empowered to make the right decisions.
If you need help getting started get in touch today.
Maria Papa is a senior property and finance expert specialising in home loans, investment loans, self-employed loans, alt doc loans, car loans, personal loans and loan protection. She has offices in Sydney, Melbourne and Manila. If you have questions, you can call Maria at 0430 144 008 or email her at mpapa@maverickfinance.com.au.
Your full financial situation will need to be reviewed prior to acceptance of any offer or product.