What a first time buyer needs to know about pre-approvals
For a first time buyer, knowing how much you can afford to spend on a home is a vital part of the buying process.
A lender may offer pre-approval of this amount so that buyers know exactly where they stand financially from day one.
Borrowers should be aware of lenders who only ask the most basic of questions, and should ensure that the lending institution is running a full analysis of the situation before making any pre-approval judgements.
This includes letting the lender know about any credit blemishes that might affect the approval.
Another trap home buyers fall into is to obtain multiple pre-approvals, as it can affect credit ratings. Once a well-researched and in-depth pre-approval is acquired, be sure to check the expiry date.
They normally last three to six months, so give a good window of time to shop around for that dream home, but can usually be extended when the need arises.