Petal James, Chief, Branches at JN Bank, is encouraging prospective homebuyers to get pre-approved as a first step to homeownership.
She said getting pre-approved for a mortgage is crucial, as it provides proof to real estate agents and sellers that the buyer is financially capable of securing a mortgage and also shows how much the buyer is able to spend on a house.
“It places you in a much better position to negotiate with sellers and it also provides you with a price point, so you are able to stay within your budget,” she explained.
Miss James noted that real estate agents often prefer to work with a buyer who has received pre-approval from a recognised mortgage institution, as it demonstrates that they are well-qualified to receive financing and are serious about buying a house.
Pre-approval is a service that is offered, free of cost, at JN Bank. The pre-approval process is quite simple, it entails providing your income details and outlining any existing debt you may have.
“We will then determine how much you can afford to borrow and present you with a pre-approval letter, along with a checklist of documents which will be required for the loan application. With this letter, you will be ready to shop around for property and find yourself in a better position to negotiate with your realtor or vendor,” Miss James outlined.
A pre-approval is based on the documentation the borrower supplies at the time of application.
These documents include:
- Copy of driver’s licence
- Birth certificate or passport
- Tax Registration Number (TRN)
- Proof of address
- Income verification letter
- Last two payslips
- Completion of the credit report forms
- Statement of affairs
Persons residing overseas will also require a credit report, which should include their credit score.
Miss James said prospective homebuyers can join with other persons to purchase a property and that similar documents will be required for the other party or parties.
Once the mortgage department at JN Bank is in receipt of the pre-approval documents, an assessment will be carried out and the pre-approval letter is issued.
The letter will include the sum the home buyer is pre-approved for, the interest rate, the term and the monthly payment.
The preapproval letter is usually valid for up to three months.
At the end of that period, if the buyer has not found a property they wish to purchase, they will be required to reapply for a new pre-approval letter.
