Before you start shopping around for the home you want to buy, you should first speak to your finance broker or credit representative. It is because he/she will help you to get your home loan pre-approved and will help you to understand the pre-approval process.

By getting your finance pre-approved, you will have the peace of mind knowing that:

>> Your home loan has already been assessed;

>> Your income and expenses have been verified, and you will know your borrowing power (i.e. how much you can borrow?);

>> You will have enough time to clear up any mistakes or problems you may find in your credit report;

>> The conditions of your pre-approval; and

>> You have the upper hand when negotiating the purchase of the property with the seller (vendor) and/or real estate agent.

When you are ready to make a purchase offer for the property you want to buy, you will find that both the real estate agent and the seller (vendor) will want to see a pre-approval letter. It is because the letter will prove to them that:

>> You are able to make the purchase; and

>> You can be taken seriously.

It is important to remember that in a competitive housing market, any seller (vendor) will prefer a pre-approved buyer to a buyer who is unable to close the deal/sale.
The Approval Process

So, now you know why getting pre-approved finance is important. To help with the pre-approval process, you should be prepared to supply your finance broker or credit representative with copies of the following documents:

>> Your most recent pay-slips (i.e. less than 30 days old);

>> Your Tax Returns for the last 2 years;

>>Your Bank Statements;

>>Any other sources of income, which could include:

1. A Second Job,

2. Overtime, Commission and Bonuses,

3. Interest and Dividend income

4. Centrelink Benefits (e.g. age pension, etc),

5. Family Benefit and Child Support Payments received.

6. Rental Appraisal Letter from your real estate agent, if you are using the property as rental property; and

7. Identification Documents (i.e. copies of driver’s license and passport).

Seek Expert Assistance and Commitment

Make sure that you choose a finance brokerage firm that employs a team of expert and professionally qualified finance brokers, who will:

>>Take time to discuss your financial goals;

>>Get pre-approved finance for the home you want to buy;

>>Help you to set up a suitable financing arrangement that meets your needs; and

>>Arrange suitable building and contents insurance cover for your home and contents.

Having examined all the necessary documentation to verify your ability and willingness to repay the loan, your finance broker or credit representative will issue your loan documentation to the lender/credit provider for formal approval.

The lender/credit provider will only issue the formal loan approval, after they have approved both you and the property you intend to purchase.