Planning to build a home doesn’t need to take up all your valuable time. You just need to know exactly where to start, where to turn and what to look out for along the way. If you are thinking of building a home, the very first thing you’ll need to do is find out what your budget really is. And there’s only one sure way to do that. You need to get pre-approval for a loan. Pre- approval lets you know what the bank is willing to lend you. Your pre-approval amount sets your budget. Without it, you’re flying blind.
Getting pre-approval for your loan
One of the first things you’ll need to do is get pre-approval.
Before you do anything else, you need to know what the bank will lend you.
Your pre-approval amount becomes your budget.
The amount you’ll be able to borrow is calculated on your personal financial position across the board. Applying to borrow money is an information-gathering exercise. It can also be a time-consuming exercise, and you can waste time if you have to have numerous meetings with the bank because you don’t have everything they need to assess your situation. This time wasting only contributes to the ‘hassle’ of building and we want to help you to avoid that. Having all the right information on hand from the start saves you loads of time.
Based on the information you give them, each lender will advise what they can offer you in pre-approved funds. You choose the option that best suits your circumstances. Not only should you be interested in the best rates and the best service, but your loan must have the level of flexibility that you desire, such as the ability to redraw on the loan if you wish or to make bulk repayments. Are they offering you the option to borrow with a construction loan (covered in the next topic)? If so, how will that be structured? Be sure you know what position you’d be in if you had a sudden change of events that affected how you serviced the loan.
Learn more at the Build Your Home Masterclass Series