Tips to follow during the Pre-approval stage
It’s the best feeling getting the thumbs up that you are pre-approved for the home loan you have applied for, but getting a pre-approval doesn’t necessarily guarantee that you will be approved.
Here are some tips to follow during the pre-approval stage
Once you have been preapproved for a home loan you should refrain from making any new debt or apply for credit. Don’t open up new accounts during this stage as it could have a massive impact on your approval & your interest rate might get higher because of it.
Don’t go into your overdraft and do not change any of your debit orders at this stage. Your pre-approval is a mere screenshot of your financial situation at a particular time. Stay within your borders until you have been approved.
Be aware that when you buy something expensive in cash or decide to pay off your credit card, that it could result in you having fewer savings to cover your transfer costs and it could end up lessening the amount of deposit you’d plan on putting down. This will again change the lender’s evaluation when it comes to granting your loan.
Don’t skip out on paying your bills during this stage, I know one can get lost in the excitement of house hunting but that excitement could cost you during your credit status review and will reflect badly on your behalf.
Keep records of any big transactions that come in / out of your account. You will need to prove where the money came from and what it was used for.
Do not apply for any credit during this phase as lenders will do a second credit check before a final home loan is approved. If you have opened an account it would have to be verified again and this could delay your approval. Your credit status could change because of the new account and this can result in changes to your interest rate.
If you purchased something significant/costly on credit, your moneylender will have to factor in your repayments into your debt to income ratio to reassess the affordability of your home loan in terms of the National Credit Act and that could result in you not getting the loan at all.
Consult Secubond your Bond Originator before you do anything as every move you make with your money will have some sort of effect. Having the right people by your side to guide you through the process will definitely give you some peace of mind.