In a competitive property market you need to be ready to make an offer as soon as you find your dream home or investment property. If you already have pre-approval for a home loan you can act quickly and with confidence when your perfect property comes along, but what if the pre-approval is taking too long?
Home loan pre-approval can take anything from a couple of days to a few weeks. While turnaround times vary between lenders, there are a few things you can do to help speed things up and avoid unnecessary delays.
What does home loan pre-approval actually mean?
Home loan pre-approval is when your lender has indicated that they will lend you a certain amount, based on the information you’ve given them. It’s not a guarantee – you’ll still need to meet certain conditions before your lender can give you unconditional approval. Having pre-approval also shows vendors and real estate agents that you’re serious and ready to buy.
Five tips to help you get pre-approved for a home loan faster
1. Have your documents prepared beforehand. You’ll need to provide supporting documents when you apply for pre-approval, including identity documents, bank statements and proof of your income. If you can get these ready beforehand, preferably in electronic format, your application can be processed faster and there will be less time spent getting everything together.
2. Sign and return any forms as quickly as possible. Your lender may ask you for extra supporting documents or forms. Make sure you return these as soon as you can to minimise delays. Your lender won’t be able to start assessing your application until they have all the right information and all forms are completed and signed.
3. Research how much you can borrow. If you have an understanding of how much you can repay ahead of time, this ensures your expectations are realistic when you apply for home loan pre-approval. This may reduce the chance that you’ll be declined for your first application and have to re-apply.
4. Know your credit score. You’ll need to have a credit check as part of your application for home loan pre-approval. It helps to know ahead of time if there are going to be any issues so you’re prepared to explain them if necessary. A not so fantastic credit score doesn’t necessarily mean you won’t get pre-approval. There are some lenders – like Bluestone – who take an understanding approach to past credit issues.
5. Look for a lender with fast pre-approval times. If a lender has lengthy turnaround times on pre-approval applications there’s not much, if anything, you can do to speed them up. There are lenders out there who offer fast pre-approvals if you’re prepared to look beyond the banks. For example, at Bluestone we can assess your completed pre-approval application and get back to you with an answer within two business days, as long as we have all the required supporting documentation.
Once you have home loan pre-approval, you’re one step closer to your dream home or investment property.