In a property market that is as competitive as the one we are dealing with in 2017, it’s not surprising that many buyers tend to get so caught up in “finding an edge” in the market place. Yet it’s amazing how many of them, particularly those looking for their first home, are overlooking one of the most obvious ways to improve their negotiating position. Here at Ian Reid’s Vendor Advocacy, we know that one of the most important ways to successfully negotiate a property purchase is to make sure that you have your loan approval sorted out BEFORE you start negotiating.
Loan approval means peace of mind
So many buyers make the mistake of waiting until they find their dream home before they get the wheels in motion on obtaining approval for their home loan. By doing this right at the start of the house-hunting process, not only will you know exactly how much you can spend, but it will also put you in a far stronger position when it comes to putting forward the strongest possible offer to secure the property.
How to speed up your loan approval…
- It is important to understand that when a lender considers your application, their priority is to confirm that you can repay the loan. Therefore, it is important that you make sure all your finances are in order BEFORE you apply.
- When you lodge an application, even if it’s only for pre-approval, you need documented proof of income in the form of copies of your payslips or your tax return. You will also need copies of your bank statements, loan statements and don’t forget 100 points of identification.
- If you have credit cards, the lenders will take repayments on your full credit limit into account in assessing your monthly commitments. Reducing your credit limit or even cancelling some cards before you apply for a home loan can be a very good strategy to boost your borrowing ability.
- Make sure you factor in all the other purchase costs, not just the price of the property. Conveyancing, building inspections, stamp duty, application fees and adjustments at settlement can all mount up if you’re not careful.
- It pays to look beyond the “Big Banks”. Independent lenders often have better deals on rates, but be sure to check out the lender and how accessible they are. It can be quite frustrating if you need to visit the lender’s office and their only office is on the other side of town.
- Last, but not least, think about what features you want your loan to have, and what you don’t. Try to avoid paying for features you won’t use.
As always, we recommend that you talk to an independent Mortgage Broker before you commit to any loan, as they are ideally placed to advise you on what loans will best suit your individual needs and future plans.
Of course, if the reason to are thinking about getting loan approval will also involve selling your current home, it is important to ensure that you approach this task with just as much forward planning. Our team at Ian Reid’s Vendor Advocacy is available to provide you with experienced and independent advice, so feel free to call us at any time on 1300 400 400. You can also find lots of helpful advice in our booklet, “Fatal Real Estate Traps Exposed”. The booklet is FREE, so why not download a copy today?