Hello

This question is really easy to answer. YES, absolutely, for sure, no doubt, of course, without question and certainly! I don’t think that I can be any more categorical about that answer. There are 2 main reasons for this. They are;

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1. It is really important to know what you can borrow. That doesn’t mean that you must spend every last cent of your approved limit but imagine finding the house that you love, and you are unable to borrow the money to purchase it. By finding out how much you can borrow you can set a limit on which houses that you should inspect.
    

2. When buying a house at auction you can not purchase subject to finance approval. In Victoria around 40% of homes are sold at auction, but in many suburbs of Melbourne it can be as high as 70% of houses are sold at auction. So, without finance approval you won’t even get a look in at a large part of the market.

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My advice is to meet up with a qualified mortgage broker and get a finance pre-approval done. I say a mortgage broker as opposed to a bank because a mortgage broker will have access to all the banks and every product. They will often be able to provide you will some helpful advice also. They are more likely to meet you at your home and be on call if/when you need them.

 

When you have a pre-approval, you may still be advised to write an offer pending finance, however if you are completely sure with your borrowing position it is well worth considering making offers without a finance clause. I have seen many houses sell over the years to lower offers that were un-conditional, sometimes by as much as $20,000. Just like a buyer can stress about the sale, the vendor does too, and they don’t know that you getting final approval is just a formality. Obviously speak with your broker for a final position on this issue.

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In summary, there is no downside to getting a pre-approval, other than a bit of time. In general, you will have it done within 2-3 weeks and it gives you real buying power as well as peace of mind.