Have You Got A Pre-Approval?

You may be thinking to yourself why do you need a pre-approval?

A pre-approval is an obligation-free way to estimate what you could afford to borrow from a lender before you make an offer on a property.

Getting an Approval in Principle will help you:

  • Know how much you could afford to borrow
  • Plan your budget
  • Be confident to make an offer
  • Be seen by agents as a serious buyer
  • In most cases is necessary in an auction

Here are some common questions regarding Pre-Approvals

How much can I borrow?

Everyone is in a different financial situation. How much we can borrow will vary, because lenders will assess our borrowing power according to our income, expenses, and financial commitments. To get a quick estimate of how much you can borrow, you can use our borrowing power calculator.

If you want to increase your borrowing capacity, there are plenty of ways you can do this such as improving your credit score, reducing your expenses, and much more.

How long does a pre-approval last?

For most lenders a pre-approval is valid for 90 days, but it can often be extended by resupplying your income and expense information to your lender.

Is a pre-approval final?

No, if your financial situation changes after you have received pre-approval, your situation will need to be reassessed. This could be because you have changed jobs, had changes to your income, taken on a new credit card or had a major change in your life like a new baby. These factors could impact the amount you’re able to borrow from your lender.

Will a pre-approval affect my credit score?

Each time you apply for pre-approval this is treated like any other application for credit and will be added to your credit history, regardless of whether you are approved or rejected. If you have a large number of credit enquiries on your file over a short period, this could impact your credit score negatively. It’s best to keep your pre-approval enquiries to a minimum and ensure you have chosen your lender before you apply.

Gabrielle Kohlman – Michael from MJ Financial Chiefs helped us purchase our family home and we can’t speak more highly of the service he provided. We had an extremely short settlement period and Michael worked tirelessly to ensure our loan was approved in that time. His communication was second to none and we were kept in the loop at every step. We would have no hesitation recommending Michael and the team to assist with your financial success!