There are many reasons to get a pre-approval before starting your property search including:
Bank Pre-approval Vs AMD Mortgage Planning Services (AMD) – what is the difference?
- It Makes your house hunt easier. A pre-approval takes away the guesswork from what you may be able to afford. There is nothing worse than investing your time in identifying your dream home or investment opportunity, only to find you are unable to get finance. It will help you and your agent in your house hunt because youll know whats realistic, and you can fine tune the kind of property and area youre searching for accordingly.
"A pre-approval can remove unnecessary stress and disappointment"
- It can make you a more attractive buyer
Sellers are more likely to take you seriously if youve already started on a plan to home ownership and financial independence by seeking pre-approval. It shows your finances are in order, so theyll see you as a qualified buyer, whos ready to act when the right property comes along.
- It allows you to move quickly
Having confidence around what a lender a bank is willing to lend you means you are in a strong position to move quickly and put an offer on the table once you find a property you like. This means you could be in a great position compared to other buyers in the market.
"Its a great bargaining chip – when you have pre-approved finance, youre effectively a cash buyer"
Banks receive hundreds of pre-approval requests every week. Most of them never proceed so its easy to understand why they take short cuts and avoid providing a fully verified pre-approval up front.
Generally, you will speak with the branch staff or their mortgage lending officer who will enter your information into their system, which will then assess your eligibility and provide you with a pre-approval letter – along with a list of conditions, including everything from verifying your income, verifying your deposit and verifying all the information you have supplied verbally. In many cases your application wont be viewed by a credit assessment officer until you locate your property and apply for formal finance approval.
One of the biggest risks with this is that the lenders credit assessor may have a different interpretation of your circumstances, and you may not meet their lending policy and criteria. Youre now at the crucial moment when you need to have finance in order to meet your contract of sale conditions, and the bank is now advising you that you are not eligible. Often the information you are given when the lender issues a decline letter is not specific and vague at best.
How is an AMD pre-approval any different to a bank?
AMD planners are experienced brokers with an inside knowledge of lenders and how their approval processes work, in some cases better than the lenders credit assessment officer. When they make a verified loan recommendation it means they have reviewed your documentation and assessed it in line with the lenders current policy. In most cases the channels we go through to obtain your pre-approval requires the lenders credit assessor to review the documents that have been provided to ensure they agree with our recommendations.
Why we recommend AMD Mortgage Planning Services
- They help us help you
AMD provides more than just home loans. Working with them we are able to provide an integrated service to help our clients identify their dream home or investment opportunity, pay their home off sooner, reduce risk and create wealth through property.
"Real Estate Advisors have no financial relationship and do not receive any kick-backs or financial incentives for referring our clients to AMD Mortgage Planning Services"
- AMD is paid on success
Its worth taking note that AMD only get paid if your loan is approved and settles so their focus is on finding a way to make each and every application successful – bank staff certainly do a great job at general banking – but they are not specialists and are more often than not, paid an annual salary. Their focus is on getting the numbers in the door – so, who do you think is going to work harder to get you approved for the best loans available?
- AMD will save you money and time
The best home loan is not necessarily the one with the cheapest interest rate. AMD mortgage planners will use their experience and expert knowledge to structure your finances so as to pay your loans off quicker, reduce mortgage risk and provide greater flexibility in the likely event of your circumstances changing over time. With access to literally hundreds of loan products they will then find the loan(s) that best fits your circumstances and finally will help you fill out documentation, prepare your application and get your affairs in order.
- AMD will stop you making common and often costly mistakes
Designing a finance structure around the features you need now and in the future is key to ensuring your loan is set up correctly. There are many hidden finance traps that first time home owners through to seasoned investors can fall into, often not realising in for years down the track. For example, while a low interest rate loan may seem attractive on face value it may not allow extra repayments or debt reduction features such as offset facilities or salary crediting. Or for investors the banks will often cross collateralise their property portfolio which can mean lost opportunities to save through multiple lenders and can be expensive to unravel in the future. AMD mortgage Planners navigate through the maze of lender options and ensure clients dont unwittingly make these and other mistakes.
"In finance, as in many things it is not so much what you know but what you dont know that matters"