Finance

Before you start to search for a new property, if you need to borrow money to complete the purchase you might like to obtain pre-approval from a lender of your choice. Pre-approval will give you an idea of how much you can borrow and any conditions you may need to fulfil in order to be approved for a loan.

Things to consider when seeking pre-approval:

• Pre-approval does not mean you will be unconditionally approved for finance when you find a property. Your lender will take various factors into account when assessing your finance application, including your financial circumstances (a loss of income or increase in expenses, such as if you have a child, are likely to be considered), changes in interest rates, and the type and value of the property you wish to purchase. The bank's lending policies may also change during pre-approval and approval, and this can potentially impact you receiving unconditional approval.

• How long is your finance approval valid for? Typically, pre-approvals last three to six months, but check with your lender when you receive confirmation of your pre-approval so you know when you might have to reapply.

• Multiple applications for loans can raise red flags on your credit history, whether or not you actually take out the loan. For this reason, carefully consider the terms and conditions of the lender's current offer and whether it would be suitable for your circumstances before making an application for pre-approval.

• Do not rely on pre-approval to enter into an unconditional contract to purchase a property. As stated above, pre-approval is not unconditional approval. You may not be approved for finance, based on the type or value of the property, therefore any contract should still contain a subject to finance clause to protect you until your finance is unconditionally approved.