(Hint. It’s not a real estate agent’s window.)

When you want to buy a home, the temptation is to start looking for it. However it’s much smarter to organise your finance first. And don’t just pre-qualify for a home loan – get preapproved!

Why you shouldn’t find your home first

You find it. Your dream home. A place with “character”, near the beach, with three-and-a-half bedrooms, walk-in pantry, off-street parking, and access to good public schools for the kids you don’t have yet. You pay for inspections, have your offer accepted, and brief an architect on your renovation vision, only to find you get rejected for a home loan.

Sorting the finance first saves time and money

It’s more fun looking for a home than finding the finance. No question. But if you put the cart before the horse you’ll just waste time and money – and put yourself under a lot of unnecessary stress. So your first port of call shouldn’t be a real estate agent, but your friendly neighbourhood MFAA member.

Pre-qualifying for a loan isn’t really enough

Some people get “pre-qualified” for a loan. But “pre-qualifying” for a loan doesn’t necessarily mean that the institution will lend you the money. The questions asked during pre-qualification are basic and the checking minimal. “Pre-qualification” merely indicates the upper limit of the amount you might be loaned, assuming the information you supplied is accurate, and your credit history is favourable. There is a better option.

Get pre-approved for a home loan – then look for the home

If you want a more reliable assessment of your borrowing capacity, you should try to be pre-approved for a loan. This is a lengthier process (1-2 weeks) that involves serious checking of your income and credit details, and lending institutions generally charge for the service. However, pre-approval can spare you the heartache of finally finding the property you want to buy, only to find you can’t borrow enough. To arrange your mortgage finance, talk to your local MFAA member today.

 An MFAA Approved Credit Adviser is not your average mortgage broker.