The Difference between Finance Pre-Approval and Unconditional Approval
Finance terminology can be confusing. When buying a house, we will coordinate with your bank or broker on the finance aspect of your purchase.
Before entering into a Contract to purchase a property, you need to know if finance is available. There is a significant difference between finance being pre-approved and finance being unconditionally approved and it’s important to understand the difference.
Pre-approval – is when a lender has indicated that they may be willing to lend you a certain amount of money subject to certain conditions. One of these conditions may be the lender’s valuation of the property. Pre-approval can give you a good indication on how much you can borrow, however, it is not a loan offer.
Unconditional Approval indicates that a lender has taken your financial information, as well as the property valuation into account, and is willing to move ahead with a home loan for a specific amount of money on a set property.
When a purchaser is taking out a loan to purchase a property, it is essential that finance is unconditionally approved before exchange of Contract or terms are negotiated with the Vendor to be ‘subject to finance’ prior to exchange.
Our Conveyancing team can assist you in all facets of buying a property and will work alongside you and your financial institution to make the process as easy and stress-free as possible. Learn more about HLC’s Conveyancing services here.
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