Should I get finance pre-approval?

Yes. End of article ;)

You should see a broker, or your bank, or preferably both. You should always get a second opinion on things that are so important. You may find a broker can even get you a better deal at the same institution you bank with. Brokers often have more skin in the game as well.

What we are talking about here is a real pre-approval where you have met with the financier or broker. You’ve submitted documents, you’ve given them your details. They’ve given you back a letter saying that you are conditionally approved for $XYZ. These pre-approvals are generally valid for 90 days, and can be extended - another reason to get in ahead of time.

We are not talking about filling in your details on a little box on a website. That doesn’t count, that’s not an approval for anything. You probably just opted in for email marketing.

A lot of people say they will start researching and then they will sort out their finance. What we find happens often is: they’ll be a couple of weeks into looking and they’ll find a house that they really, really like but they haven’t got all their ducks in a row to be able to purchase it. So they hastily arrange their finance and may lock into a bad deal (for 30 years!) just to get approval quickly to secure the property. Take your time and do it properly.

The other side of this is taking too long for finance and missing the home all together.

What the pre-approval does is make sure that you can put your best foot forward if you choose to.

Another big thing is that it gives you a huge negotiating position if you’ve already got approval. If a seller has two offers and one is pre-approved and one isn’t, you know which one they’ll choose.

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