Pre-approval amount?

Recently joined here, and already learning a lot.

It's probably a very noob question, but here we go:

When you apply for a pre-approval, do you nominate a loan amount yourself? Or does the lender give you the maximum amount you can borrow based on your income/expenses?

I am more interested in knowing about ANZ policy.

Thanks!

 

You nominate how much you want to borrow.
Why ANZ?
Why a pre-approval? Most are not credit assessed anyway.
Why not use a mortgage broker? They'll be able to tell you your actual maximum borrowing capacity with a range of lenders

 

Wrong question, really. Never relied on approvals.

Get a good mortgage broker. Give your requirements. They will tell you they are confident of getting $x with lender A.

 

Your loan amount will be dependent on your savings and funds to complete for the purchase.

A broker/lender can say you can borrow $1m as a loan, however if you dont have the deposit to substantiate that loan, then the borrowing limit becomes irrelevant.

 

A broker will be able to look over your finances and tell you what a reasonable amount would be, and how likely you are to get it.

You can then apply for pre-approval which will be a nominated amount.

 

I thought pre-approval apps >$1M were credit assessed -- suspect most syd/melb props fall into this category?

 

Nope and Nope

 

A warning from recent experience. Just because you are pre-approved for a certain amount doesn’t mean you will be approved for this amount when you sign a contract and need full unconditional approval. Even if you are within the 3 month pre-approval period.

 

That's why I rarely suggest pre-approval. A good broker is your pre-approval.

Think about it from the perspective of an assessor; If I've already got a massive backlog of genuine loan applications, am I really going to prioritise and / or put all that much effort into people requesting a pre-approval, 80% of which will probably never even proceed with the loan? Think about how demoralising that is.

Pre-approvals take ages. They aren't always perfectly reliable. And they are not legally bound to them. They are more for people who refuse to go with a broker and want a rough sense of how much they can borrow. "Rough" being the key word.

 

I thought pre approvals were more for if you were struggling to get a loan then you would attempt a pre approval. If you have 20% or more a great savings history and solid jobs then you probably would not even need a pre approval. As others have said a broker will tell you where you stand.

 

In my experience pre-approval carries some weight with the agents when assessing if you are a serious buyer.

You just have to keep in mind you may not get finance up to your pre-approval amount.

 

My pre-approval recently expired and my broker said there is no need to go get an extension provided my circumstances haved changed (they haven't). Is this ok or should I insist on getting an extension for peace of mind?

 

You'll be fine without it, save another hit on your credit file and trust your broker

 

ANZ preapprovals are quite slow - goes into their slow queue. Not too much value redoing it if you've already done one and nothings changed.

 

I like the confidence of a pre approval.
I have one in place and usually always do when i go into the property hunting mode

I have done this for 14 years of investing has never failed me.

 

Which lender?

 

It always baffles me why ANZ is soooo slow, and why they just don't get their act together and do something about it....Surely they should be doing something different to all the other lenders out there...
I personally know two people who chose not to go with ANZ merely because of their slow approval process.