The process of obtaining pre-approval can be exciting, but time consuming. Gathering all the relevant paperwork can be overwhelming, but without prior approval you won’t know your borrowing authority and may not be able to make a secure bid on a property.
Prospective borrowers may be hoping to streamline the process by avoiding going to a branch to apply for a mortgage. This is where online mortgage applications come in, allowing eligible borrowers to get pre-approved for a home loan online.
As long as you meet the eligibility criteria set by a mortgage lender, you should be able to apply for pre-approval through the lender’s website.
Obstacles to pre-approving a home loan online
While applying for a home loan online can be a relatively straightforward process, there are times when the application may not go through. Some common reasons you may be turned down for pre-approval for a home loan online usually relate to issues with your paperwork, issues with the property, or no longer meeting eligibility criteria.
Reasons for rejecting online pre-approval may include:
- The lender is unable to verify your identification documents or credentials.
- The lender can assess the property and determine that it does not meet its loan-to-value ratio (LVR) requirements.
- The lender can assess the property and determine that it is not an acceptable type.
- Your financial situation changes (job loss, reduced hours, etc.)
Before applying for a home loan online, make sure your documents are up to date and in a readable format accepted by the lender. If there are any inaccuracies on your application, such as your length of employment or number of assets, it may result in rejection.
It is also essential that you review the lender’s eligibility criteria before submitting an application. Not only can this help improve your chances of getting approved, it reduces the risk that the lender will reject your application, which can hurt your credit score.
Benefits of online mortgage pre-approval
One of the main benefits of getting mortgage pre-approved online rather than visiting a branch is how quickly your application is assessed.
Online application processes can scan your documents and read your application immediately. This means that some mortgage lenders can advertise a pre-approval online within 15 minutes.
- Keep in mind that pre-approval and unconditional approval are separate, and the latter can take several business days after a property appraisal.
And while the process of getting your mortgage pre-approved online takes just 15 minutes, provided you have your paperwork ready, the actual pre-approval time doesn’t take very long.
Most lenders offer home loan pre-approval for 2-3 months. This is not indefinite, and it is in everyone’s best interests as your personal financial situation may change during this time (for good or bad), as well as the home loan market itself.
You may find that your first pre-approval expires, but due to a recent career promotion, for example, you are now eligible for approval for a larger loan amount. Or, the mortgage market may have changed and interest rates may have come down.
If the process of applying for a home loan, whether in a branch or online, seems tedious to you, it may be worth asking for help. RateCity may be able to help you find a qualified broker in your area to help you with your request today.