Do I need a preapproval?

Do you need a preapproval?

Do I need a preapproval?

A home loan pre-approval basically says “here you go, you can borrow this much, according to our borrowing criteria”, essentially it’s a letter from your chosen lender that says that they like you as a borrower, confirms your loan amount and provided the property you desire is suitable to the lender you should be all ok.

It means the lender has looked at your credit and employment history and considered your income and expenses and they all line up with their comfortable policy.

In some cases all you will need then; to get your final approval, is for the lender to carry out a property valuation and you’re set.

Some preapprovals are better than others, however; and you should always rely on a fully assessed preapproval before you make any offers. What does this mean – well this means the lender has looked at all of your information and a credit assessment has been completed. There are instant preapprovals that can be completed online and directly with some lenders – but they’re nothing more than a computer response without any checks and confirmations. You can imagine how easy it is to come unstuck with these.