When you start the home buying process, getting your finances pre-approved is a key step that can boost your confidence and give you a leg up in the housing market. Pre-approval means a lender takes a look at your financial situation and lets you know how much they’re willing to lend you based on your income, credit history, and other factors. In this article, we’ll break down what pre-approval is, why it’s helpful, and how it can make the home-buying process for Kiwis easier.

What is a Pre-Approval?

A pre-approval is like a tentative thumbs-up from a lender saying they will loan you a certain amount. It shows that you meet their requirements to borrow a certain amount of money and instead of a mad scramble when you find your perfect property, you’ll be good to go when the right one comes along. 

Benefits of getting pre-approved:

• Stronger negotiating and buying power:
  Having a pre-approval allows you to bid on a property at auction, (if the property is signed off via the bank prior) and also makes you a much more attractive buyer if you’re putting in an offer on a home. This can be a big advantage in a competitive market as vendors often prefer offers from buyers with pre-approved financing.
• Knowing what you can actually afford:
  Pre-approval helps you set a realistic budget for your home search. Knowing your maximum loan amount allows you to look for properties that fit your price range, saving you time and effort.
• Faster loan processing:
  Once you find the perfect home, having a pre-approval speeds up the loan application process. Since the lender has already looked over your financial info, finalizing the loan is more efficient, which shortens the time until you close the deal which once again 

In New Zealand’s ever-changing property market, getting a pre-approval is a smart move before you start searching for a home. It’s important to team up with a reliable mortgage adviser who knows the ins and outs of the market and can help you navigate the pre-approval process stress free. At Buddy, we’re experts at getting the Kiwis the best deals and offer tailored advice at no cost - get in touch with our team to start your pre-approval process!