Why getting mortgage pre-approval before buying is beneficial
You begin your search to buy your dream home by browsing online through property portals at houses for sale in your favourite areas of Dubai - this, of course, is a good starting point, however, are you looking within your budget?
The importance of securing a mortgage pre-approval before beginning the search to buy a property is imperative. Even if it may seem premature wouldn't you like to know exactly how much money you have to play with and not get your hopes up by looking in areas well above your budget, or perhaps the opposite - you have a larger budget than you first thought.
Benefits of getting a pre-approval
The benefits of a pre-approval are undoubtedly endless and essential for home hunters. If you already have a pre-approval in place, you know your affordability when beginning your property search. You have a solid knowledge in place of what fees are expected upfront and be clear on how much cash you will need to complete a transaction. Additionally, you will know how much your monthly repayments will be so giving you the confidence when communicating with agents and negotiating with sellers.
As well as this, when the right property comes along, you are in the best possible position to make an offer. You are ready to take the next step and avoid lengthy delays if you were to then approach a bank to start the pre-approval process.
The advantages of a pre-approval are also of much benefit to sellers. A seller will appreciate the readiness of the buyer when an offer with a pre-approval is presented. If you are a seller, you don't only look to get the best price for your property, but want to make the process of selling as simple as possible for yourself and the buyer. A buyer with a pre-approved mortgage is ideally the perfect patron for you.
As a buyer, you save yourself the heartache when you find your dream home only to lose it because you didn't have a mortgage pre-approval in place at the time of placing an offer.
Taking out a bank loan is a very big decision and often one that comes with apprehension and stress. Team this up with the decision of which property to buy, which area to buy it in and how much to spend is a massive life event and generally the biggest life decision you will make.
So many buyers make the mistake of viewing and offering on a property without having a pre-approved mortgage in place. This only leads to delays and a seller not taking the offer seriously and ultimately ends in a competitive buyer purchasing the property.
Benefits of you using a mortgage broker
In order to get the best advice when making such a paramount decision, it is advisable to go through a mortgage broker. They have a wealth of knowledge, experience and are on hand to guide you through the process.
To most people, two of the most valuable things in life are time and money, luckily by using a mortgage broker you can save on both. A good mortgage broker can potentially save you thousands in upfront costs and much more over the duration of the loan by investing time in you to pin point your needs and how best to suit them.
As a result of the vast amount of business mortgage brokers put through the banks they have access to certain products and services which can save you a lot of money, including offers of zero processing fees with select banks and even reduced interest rates.
A highly professional mortgage broker will speak to all the banks across the market on your behalf. If you were to go directly to the bank, they will only offer you their services, which might not be the best for you, resulting in you to trailing around different banks to find the best option.
The existing relationships that the mortgage broker has built over time with the banks is extremely valuable when negotiating the best deal for you. They aim to make the process as hassle free and relaxed as possible.
Getting the pre-approval is only the first step in the mortgage process and there are plenty of hiccups that can occur along the way. Whether it could be amendments to a banks terms and conditions, a low valuation that needs to be challenged, a non-resident seller with no bank account, troubles involving the NOC, liability letters expiring, or a multitude of other potential obstacles a mortgage broker will work closely with their in-house sales progression team to guide you through the entire experience and make sure your interests are protected at all times.
The writer is head of mortgages with Allsopp & Allsopp. Views expressed are the author's own and do not reflect the newspaper's policy.
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