Approval in principle means you are given finance approval 'in principle' (if you have fulfilled the lending criteria) prior to purchase.
This means that you:
- are in control
- have an indication of how much you are able to borrow
- have a realistic budget when you are looking for a property
- will have the confidence of submitting offers
- can be treated as a serious buyer by agents when
negotiating for the right property
When buying a home, the first place to start is to get Pre-Approved. Getting Pre-Approved for your home loan gives you the authority to place offers on properties for the amount you are Pre-Approved for or less. This is a very important step in the process and it is highly recommended if you are thinking about purchasing a house. This will help provide you with the confidence to place an offer and avoid any problems or issues with obtaining finance once an agreement has been reached.
Being Pre-Approved will also let you know where you stand and will verify what price point you can purchase at.
At Addisons we educate you on how the banks evaluate your loan application in the following areas:
- Credit - There is no minimum credit score required, and you can even have been bankrupt in the past. Your Consultant will discuss your credit situation with you. If, for any reason, your credit will not allow you to purchase a home immediately, we will tell you exactly what needs to be done in order to qualify for a home loan in the near future.
- Income - We will discuss your current employment and income situation, and determine how much you can afford. This will prevent you from making an offer on a house that you cannot qualify to buy, or that has a monthly payment more than you can comfortably afford.
- Assets - We will discuss how much you need, and even options available if you do not have the required funds available.
Once we have discussed these items, we will work together to determine the price range that you can be qualified for, and will be comfortable with.
