Why is it important to get a pre-approval when looking for funding?
The pre-approval for credit is important for both consumer and mortgage credits. Especially important and useful in the second case.
Each bank has its own risk policy, respectively requirements for the potential client’s profile. Depending on the requirements and the extent to which the client fulfils them, the parameters for the requested credit are determined.- size, term, type and need of collateral such as wage transfer, co-debtor or guarantor.
One of the main requirements under which the creditor bank considers whether to grant the desired credit is whether the client is has been regular payer on already existing or previous credit obligations. Under credit obligations, fall all kinds of credits from banks and non-bank financial institutions, credit cards, leases, payables, overdrafts, and so on.
Before credit documents are submitted to a bank office, based on the objective information provided by you, our credit consultant will give you a very close estimate of whether and on-base of what parameters you will be approved for the credit you want.
This preliminary assessment will save you any postponing or delaying in applying for credit in the future due to additional bank requirements or refusal.
Pre-approval for mortgage credit is an even more important step that we advise each client to take.
When applying for a mortgage, it is not mandatory for you to have an already selected property to request pre-approval.
You may need to provide your client account data to verify your creditworthiness. After auditing the income and liabilities, the creditor bank approves the potential client for the respective amount of credit. Typically, the approval is valid within six months.
During this time, the client can look for the property he desires. If you are signing a preliminary sales contract you as a client will have the peace of mind that you have secured financing.
When signing the Preliminary Contract, a deposit is usually paid (usually 10%), which you could lose if the credit approval is delayed or rejected. Pre-approval gives you the certainty that this will not happen.
The property that will be the subject of collateral for the future credit must also be approved by the bank. The percentage of funding depends on the type of property, its age, location and other factors.
Not that few banks offer the “Pre-approval” service. With our help, you can quickly and easily take advantage of this.
Only Creditchoice’s customers will be pre-approved free of charge in any bank.