Finance Approval - Which One Is Best
When buying a home you may need to apply for a home loan to complete your property conveyancing transaction
. You should ask Longmores Property Conveyancers for a recommendation of a mortgage broker with will source the most suitable loan for you. Selecting the right financial lender plays a very major role. It is a very important decision that you will have to make as you may have to keep paying this loan for up to 20 years. There are plenty of options available for you. There are many banks and non bank lenders that you can now choose from.
Banks and Non Bank Financial Institutions
Normally, there is little that you can differentiate between banks and non bank lenders since both of them offer more or less similar home loan products. When looking for a home loan, it may be worth your hard earned cash to consult a mortgage broker as they can guide you in choosing the right home loan product to meet your specific requirements.
Role of a Mortgage Broker
A mortgage broker is a go between, between you and the lending company. A mortgage broker will identify your needs after a detailed consultation with you and then they will locate the various lending options that meet your requirements. The broker will also negotiate on your behalf with the lending companies and also arrange for all the necessary administration requirements in order to finalize the loan.
There are quite a few advantages in engaging the services a mortgage broker. Firstly, you do not have to pay any fees to the broker since they earn their commission from the lending companies. Next, a mortgage broker has very strong market knowledge and has detailed knowledge of the current home loan products available in the market. This means they will be able to assist you find the right mortgage loan that suits all your requirements.
Types of Pre-approval
Even though there are different types of loan pre-approvals available in the market place, it is important that you opt for "unconditional approval" as this provides you with the most finance certainty when negotiating with a vendor or when you are taking part in an auction. Once you have fulfilled all the necessary requirements, the lender will issue a loan approval letter stating the amount of the loan that is approved on your behalf. A pre approval is not a formal approval but an intention to finance subject to certain conditions. In this stage even the property you intend to purchase is not determined. Finally, a pre approval puts a cap on how much you can borrow.
Remember the most important rule is NEVER exchange contracts without unconditional financial approval being obtained. Otherwise you will be legally bound to complete the contract by the settlement date. If you do not complete the contract by the settlement date you will be in breach of the contract and may incur penalties or even forfeit the deposit by on exchange.
If at all in any doubt about what to do when you are commencing your property conveyancing don't forget to contact Longmores Property Conveyancers on 02 44210360 or visit our website for further contact details.
by: Judy Bliss
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