Covid-19 has changed the world. There is no doubt.
For many of us, we are learning to live differently and to work differently. That extra room at home or the granny-flat outside could make a huge difference as a home office, school homework room or even business headquarters. So maybe it’s time to consider a move…
You could start looking around at houses online, visit showhouses (be sure to follow safe ‘social distancing’ protocols), eventually fall in love with a place and sign an offer to purchase, subject to bank loan approval. Then submit your paperwork to your bank and wait for the approval… hopefully.
…but it’s declined. What a disappointment!
Besides the normal assessment criteria, Covid-19 has introduced a whole new level of uncertainty into bank finance risk assessment. If there is uncertainty, then the banks are obliged to protect their shareholders, (you may even be one through your pension fund or unit trust savings,) and a very conservative assessment will result. Indeed, if you are self-employed, things will be tougher than what they already are.
The better route to follow might look something like this;
- Decide carefully if you really need to move. If you can re-arrange things and get by in your existing home, then that is the best choice. No additional expenses.
- If a move is looking more strongly like a solution, then do a brief affordability check. Review your income and expenses and see how much is left over to fund any new or increased home loan repayments. For an easy check on how much the banks might approve for you, use our ‘Quick Affordability Assessment‘. This will give a good initial guide as to how much you can afford. (It’s pretty accurate for salary-earners. Self-employed folk will have their businesses assessed together with their personal applications)
- OK, so you ace’d the Quick Affordability Assessment and you are now getting serious about the whole thing. Before you even start to look at showhouses, you need to get ‘Pre-Qualified’. A formal pre-qualification certificate is your ticket to drive a hard bargain with sellers as it shows that you are a serious buyer with an extremely high likelihood of getting loan approval. Pre-Qualification shows that;
- Your personal identity has been verified;
- Your proof of residence has been verified;
- Credit checks have been done and satisfactory results obtained.
- Your employment and income has been verified;
- …and your affordability has been assessed up to the level shown on the Pre-Qualification Certificate.
To get pre-qualified, tackle our ‘Pre-Qualification Application‘. This is a more in-depth process, but it’s completely on-line and you can do it in stages. (Be sure to open a profile account on our website). At every step along the way you will have access to one of our team by phone or email if you need a bit of socially-distanced human touch as you go.
At Silent Partners, our Pre-Qualification process is a free service. All it costs you is your time.
So, if you are considering moving to a new home that you own, follow the clever process and get pre-qualified upfront. After that, you can shop with confidence.