Home loan pre-approval

sreenithk · Jul 10, 2019 8:01 pm

Hi all,
I am purchasing land and building. the land is going to be registered only in Feb-Mar, 2020. as of now i just need to pay only 5% for the land and there is no need to secure a loan now. My mortgage broker says that its still better to go to the bank and get a preapproval in place, just to safeguard against any policy changes or so that the bank may bring later.

Is that true? is there any advantage or disadvantage to go for the preapproval now instead of going for it in jan, 2020.

thanks
Sreenith

ASJ1981 · Sep 06, 2019 9:43 am

Hi Sreenithk - getting a Pre Approval now is a good idea - personally for me, it's peace of mind that 1) you can obtain a loan and 2) you at least have an idea of what your lending capacity is.

Since your land is registering in Feb-March of next year, i'm assuming you are starting to do your homework now and are looking at your options of builders and with that comes costs etc etc. Wouldn't you want to know how much you can afford whilst doing your research? Pre Approvals generally are valid for 3 months. When you are ready to apply for finance, you already have an idea of the process and can sort out what paperwork you need to submit to the bank.