The importance of bank pre-approval: Why you should not view any properties without knowing how much the bank will lend you.

Why it is more than advisable to have bank pre-approval before looking at houses, because the house hunting process can be confusing. There is a lot to learn about mortgages, paperwork and viewings, and I am going to tell you what the most important step is: getting bank pre-approval before you start looking at houses, so that you know how much money the bank can offer you and how much you would have to pay each month. This way, you will only view homes that you can actually afford, because it gives you a clear idea of your possibilities.

What is pre-approval and why should you get it? Pre-approval is a document from the bank that establishes how much money they are willing to lend you and what the terms would be. It is not the final mortgage, but it gives you the go-ahead to start looking with confidence, so with pre-approval, you don’t fool yourself into thinking about houses that are out of your range, and you appear more serious when you are negotiating, because other buyers could be left behind. With pre-approval, everything is faster, and if you find ‘the house’, the financial institution has done half the work, because you have clarity on how much you would pay monthly, and not simply ‘how much they will lend me’, but ‘how much I pay monthly’ and whether you have the ability to do so. You do not compromise your deposit, because you are not at risk of losing money without guaranteed financing, so this gives you peace of mind.

What does the bank examine to pre-approve you? The bank examines several factors, such as your salary and employment: payroll, contract and length of employment, and your obligations: your overall payments cannot exceed 30-35% of your net salary. It also examines your savings, because you need money for the down payment and acquisition costs, and your credit history, because the bank wants to know how you make payments and your current products, so you need to provide the necessary documentation, such as your ID card/foreign resident ID card/passport, latest payslips, employment history, bank accounts, and obligations.

How to get your pre-approval, because to get your pre-approval, you must follow several steps, such as gathering basic documentation, because you need identification, payslips, contract/employment history, accounts, obligations and savings. Next, you must determine what you want to purchase, because you need to know what type of property and price range you are looking for, and take out a mortgage, because you must compare different options, such as fixed, variable or combined, and fees, links and total APR. After that, you apply for pre-approval, because the financial institution will inform you of the limit and how much you would pay monthly, and you visit homes with a specific goal in mind, because you already know your range, you only visit viable properties and you save time.

Additional expenses apart from the cost, because there are several additional expenses you need to consider, such as the down payment, taxes and acquisition costs, such as ITP or VAT, notary, registration, agency fees, appraisal, and emergency fund, because you need money for moving, minor repairs and a contingency reserve. Fixed, variable or combined: how to decide easily, because you must consider different options, such as fixed, which is the same instalment every month and is better if you need security and set rates, or variable, which is generally lower initially but fluctuates according to the index, and you must be prepared for increases, or hybrid, which is a compromise based on the market and your plans.

Mistakes we commonly make and help you avoid, because there are several mistakes you can make, such as going to see properties without pre-qualification and falling in love with something you cannot have, or only considering the price and neglecting taxes and expenses, or handing over a deposit without securing financing, or selecting a mortgage loan only for ‘the interest rate’ without considering fees, associations and the APR, or not comparing financial institutions or discussing the terms, so you need to be careful and avoid these mistakes.

How we support you step by step, because we understand that this process can be overwhelming, and that’s why we’re here, for a free initial financial assessment to find out your true purchase range, and we assist you in gathering documents and applying for your pre-qualification, and we compare proposals from multiple banks and negotiate on your behalf, and we explain each alternative clearly, without technicalities, and we guide you on visits to properties that match your pre-qualification, and we will be by your side during the appraisal, deposit and signing, scheduling dates to ensure that everything goes smoothly.

If you’re feeling confused today, that’s okay, because no one knows about mortgages from the start, so let us help you. We’ll start with what makes you feel most comfortable: your pre-approval. Write to us today and we’ll calculate your purchase range and request your free pre-approval. and when the right house comes along, you’ll be ready to get it with the type of financing that best suits you, because you’ll be ready to make the right decision.