Just wondering, is it ok to have a few pre-approvals in hand? And then when i find the right property, i will then use the best option for finance. I do not see any problems(???) in this but just want to make sure. Will the banks see this as something negative if i want to purchase more IPs in the future?
Thanks.
Having a few pre-aprovals handy, i am guess you mean applying for a pre-approval through a few different lenders at a time.
What benefit do you have in this?Remember, that a pre-appoval means 'that your financial situation has been assessed and that you deem eligble for a loan within the parameters mentioned in the pre-approval offer". You are not specifically approved for a specific finance package or interest rate. In todays current market – interest rates and finance packages offered by lenders changes all too often, so by the time you find a property to purchase, the Lender you got your pre-approval from, may not have the 'sharpest' package on offer at the time. Nor would it guarantee that if you apply through more than one lender for a pre-approval that they may have the sharpest on offer at the time. So you may end up applying for ANOTHER one when the time comes. This does not make your credit score look good (too many credit enquiries).
It is best to look past the interest rate curently on offer, but look at the 'total package' that lender may provide you. a good broker will assist you finding you the lender whic caters most of not all your needs and has the felxibility that best suits you. That is the lender you should be applying for a pre-approval for.
Hope this helps.
Thanks for your response BMW. I think you have misunderstood my question. I have recently applied for a pre-approval though a MB and its all done, just waiting to find the right property. However, I have found out that the pre-approved loan does not have some facilities that I'm looking for (shud have look into more detail!!). Anyways, now I'm thinking of going with another MB who has offered me a loan which has the facilities that I want eventhough the IR is a bit higher.
So, now i'm wondering, if i apply for another pre-approval would that jeopardise my creditability with the banks in the future shud i want to purchase more properties? I think to a certain extend you have answerd my question BMW. Cheers.
Hi extradry. You are under no obligation to go throught with any loan preapproval – if you are not happy by all means get another instead. But as BM W said, on a 'proper' preapproval, you will have a credit check done on you. This does not look good form a lenders perspective, and may jeopordise an exisitng preapproval you have in place. I had a credit department where I once worked demand to know prior to settlement why the client happened to have another three banks/lenders have credit enquiries on their file just as the laon was about to go unconditional – and trust me – they wanted a good answer. The answer was that ' oh, we were just looking around and seeing if we could get other approvals..'
One other lender should not cause any grief though.
Your borker should be able to give you an idea if you meet a certain lenders criteria PRIOR to applying for a preapproval, thsu avoiding the problem altogether.All the best
HI extradry,
Sorry for mis-understanding you. No you should not a problem for going with one more at thsi present time. And down the track fi you wish to purchase more Inv properties, that wont be a problem also.
However also – your MB shoudl be able to pre-qualify you and give you feedback whether it is necessery to apply for a pre-approval or not. The only time i probably would recommend a pre-approval is for when your financial circumstance is a bit 'ify' (whether it is your employment, previous credit issues, deposit etc), and when you have little or no deposit thus require a Deposit Bond for an Auction.Good luck!
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