Why should you get your home loan pre-approved
It is a good idea to get your home loan pre-approved before setting out to find your dream home. Why? You are in a better bargaining position when dealing with real estate agents if you have a full pre-approval from a lender. You will know how much you can borrow therefore how much you can offer on a property. The first question many agents ask you is " Have you got pre-approval yet?" If not, some agents are less likely to want to deal with you and may give other potential buyers priority over you.
Care needs to be taken with obtaining a proper pre-approval. Some lenders do not offer a full pre-approval, in other words they don't fully review your personal financial circumstances and the approval provided is subject to many conditions that may or may not be able to be complied with when you find your new home. Lenders who offer a full pre-approval carry out checks regarding your ability to repay the loan, employment and income checks, credit checks and more. The one thing they can't review is the property (if you have decided on a particular property, a full loan application would be submitted instead of a pre-approval application).
With a full pre-approval you can be pretty confident that your home loan application will be approved (subject to the property being acceptable to the lender including a satisfactory valuation). You will be able to search for properties within your price range instead of spending time on homes above or even well below your expected purchase price.
Pre-approvals usually are valid for a period of 90 - 180 days. After that period a further application will need to be made or the original application updated.