FINANCE SERVICES
Looking to Obtain a Pre-approval
The Common Misinterpretation
Many people have come under the misconception of what the difference between a “Pre-Approval” and a “Formal Approval” is. This has simply stemmed from the banks trying to lure customers into products by use of misleading terms. To set things correct below is the true meaning of each term and how it can affect you;
Pre-Approval
The Pre-Approval is a “subject to” approval a Lender will issue which sets out what the Lender requires before they can issue a Formal Approval. Some clients choose to seek if they can gain finance before looking for their dream home. This can be a great way of purchasing your house, as not only do many Real Estate Agents exclusively deal with clients who have Pre-Approvals, but you may be able to bargain the price of your purchase down through having your finances in order. It is always imperative to note that while this is a Pre-Approval it is not a Formal Approval and there is always still conditions included in a Pre-Approval until it is “Formalled”. Your Able Finance Consultant will advise you of these conditions and how you can satisfy them.
Formal Approval
A Formal Approval, on the other hand, is an Approval by the Lender with No Conditions attached. This Approval means that the Lender accepts all loan details and property details and is Formally Accepted to lend to you for your home purchase. Upon Formal Approval your Able Finance Consultant will liaise with yourself and both your Conveyancer (If applicable) and Real Estate Agent (If applicable) advising of the Formal Approval and where the process will be heading from there including all time restraints.