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Beginning with home credit when you want to buy a house may seem strange, but it can actually be a very smart strategy for those who don't want to waste time. But how do you get to pre-approve a loan from the bank without having a chosen home and without knowing how much you will spend on the property purcahase? And why is it a good option to do so? We explain everything, with the help of experts.
The pre-approval of the home loan consists of analyzing the financial profile of the client, assessing their income, expenses and associated risk level, and accordingly calculate a loan amount for which they can obtain approval,as explained by the UCI, in this article prepared for the idealist/news. The result of this procedure is therefore a ceiling, which reflects the amount of funding that the credit institution can finance, subject to certain conditions.
The usefulness of this prior analysis
Set a price range for searching for homes
It should be recalled that, currently, the general credit institutions grant a maximum financing value of up to 90% of the value of the property, so when you know how much you can obtain a loan, the customer also becomes a notion of the value of the purchase that can arrive, avoiding wasting time with options of houses that are not within their current financial capacity. So when starting the demand for real estate,the potential buyer can already define a realistic range of values, for which he knows that he can approve the financing needed to realize the business.
Set the type of house you can buy
Similarly, knowing in advance the amount of funding that can be obtained before you start looking for a home can help define other criteria for searching and selecting properties, such as location, typology, square meters (m2), finishes, for example. Knowing how far values you can go is an excellent strategy not to waste time with properties you can't buy after or that can generate frustration during the buying process.
Give a more immediate answer
Many businesses do not materialize, because buyers, when they find a house they like, cannot commit immediately and need to first obtain approval of the value of the housing credit. In this time interval comes another interested buyer who passes ahead. Having a pre-approval ensures that, in meeting the approved conditions (such as the purchase value of the house), you can get a loan up to that amount, so if you find the right house at the right price, you just have to close the deal.
Streamline the credit process
Taking care of the loan process, at a time when you only think about taking care of moving house, is stressful. By having the loan pre-approved, it becomes the simplest and quickest process in the end, and you can even move house early.
"At the end of the day, pre-approving home credit can be a way to make home buying more focused and effective, knowing from the beginning what you can count on and what kind of home you can buy. No time losses, no misfit expectations," the UCI summarizes.