Do you get loans before finding the right place?

This is just a question about financing in general. I know that lenders valuate a place after you've made an offer but how often does one get a large loan approval made out before any offer is made (ie like before an auction or just for having the ability to offer unconditionally). Is this something that only really works if you've got decent existing equity in another place (ie your PPOR)?

I never go shopping without the loans side figured out... otherwise I won't know what (price range) to look for :)


The Y-man
No a pre-approval can be issued on any property however the question comes as to the type of pre-approval and the use of it as a tool for price negotiation.

Absolutely bo point in a lender giving you the nod subject to 101 conditions and then telling you once you have complied with these come back and we will look at the deal as this type of pre-approval is worthless.

A pre-approval should be subject to executing a contract and a satisfactory valuation. Where appropriate it might be subject to LMI approval. The lender has carried out a credit search verified your income and other documentation and be in a position to go forward.

If you are looking at buying at Auction i would certainly get your Broker to arrange a valuation on the property prior to the bidding date as too often you can find the purchase price and the valuers estimate of price are a little off.
Yes a loan pre-approved is certainly important otherwise you have no idea how much you can spend. Unless you are so confident of having a loan approved then you could always start looking around before hand but you shoul get the loan approval process started as soon as possible.