We wanted to give you some valuable tips around your next house purchase if it involves obtaining a finance loan through a bank or broker.
We recently had a client who nearly lost the house he was purchasing because he didn’t do these couple of things upfront, and the 21-day finance clause that was included in the Contract ended up being extended by 5 weeks. Fortunately, everything worked out in the end for this purchaser; however it probably could have been avoided.
The first thing you want to do before you go out and even look for a new home is to meet with your mortgage broker or bank manager. Here are a few things you will need to ask them/find out:
- What documents and information do you need from me upfront so when I find my dream home I can put in an offer? It’s then crucial for you to organise and provide these to your broker/bank manager before you start looking for a house.
- How long will formal approval take once I find a home in my price range? It’s also wise to confirm how long it’s going to take for formal finance approval to come back so that you can align the Contract condition dates accordingly.
- If you are going through a bank, check if the home you’d like to buy (and what you want to use it for) is within their lending criteria. Bank loan policies are changing more frequently than ever and this is important if you want to be approved for a good rate.
- Am I going to need mortgage insurance? It’s best to ask your mortgage broker or bank manager if you’re going to need to pay mortgage insurance; it usually comes down to the deposit you have to put towards the home.
They will prompt you with everything else they need specific to your current situation, but this will get you started. On top of all of the above, you want to make sure whoever you go to gets you formal pre-approval on your loan amount as there have been cases lately where some buyers have received verbal approval from the bank’s employees but then have been knocked back after they’ve gone to Contract on a home because it wasn’t actually within their borrowing capacity, even though the bank’s employee had previously told them it was when they first started looking for a home.
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We hope you found this helpful. Happy house hunting!
The Daniel Burrett Team