A loan pre-assessment is available from the bank when you know you want to take out a home loan but have not yet selected the property. In such cases, the bank will not, of course, yet examine the property, just how large a home loan you are eligible for. Pre-judging has several benefits, which is summarized in this article.
You do not start at a disadvantage compared to cash buyers
When buying a property, there is no doubt that those who pay in cash are the preferred ones, as it is not a question of solvency, nor is it that the deposit is immediately deposited with the seller. Conversely, homeowners may have too many pitfalls: they may not be able to obtain enough credit, or the bank may refuse to apply. Sellers are reluctant to take this risk.
A bank pre-assessment will help with this, as after a preliminary examination, the bank will confirm that you are creditworthy, which is enough to guarantee the seller to enter into a contract with you.
Use it to prevent hasty decisions
If you start applying for a home loan without pre-judgment and the bank rejects your application, you will not only lose your dream home, but also money, since by the time you get to the final credit assessment, you have already paid:
- attorney’s fees,
- valuation fee,
- ownership price,
- occupying (this is usually 10 percent of the value of the property!).
However, thanks to the pre-assessment, you will know how much home loan you will be able to take out and whether you are creditworthy. This will also reduce the range of properties you can buy, as you will see how long you can go for the price of the property. This way, you may not choose a property that does not fit your budget.
The loan application will be smoother
If you end up applying for a home loan with the bank where the credit assessment was done, then the bank does not have to start the credit assessment anymore because you already know your financial circumstances. Only the real estate you choose is examined when you apply, so the process is faster and smoother than having to start all over again.
Easier to choose the best bank for you
Preliminary credit assessment is already free at several banks and there is nothing to prevent you from starting the process at several banks at the same time.
However, be aware that the creditworthiness test issued by one bank is not valid for the other bank – each bank assesses its customers’ creditworthiness according to its own internal rules. Therefore, it is a good idea to check the bank offerings before the credit assessment and ask the bank where you found the best deal for you.
The best tool for this is a home loan calculator that compares the best available home loans with just a few clicks. You can use the Gino Great calculator to set the loan amount, maturity and length of the interest period. You can also sort your bank offers by APR, monthly installment, and total refund amount.
The credit pre-assessment is free
Pre-judging is free at most banks, and the other great benefit is that it does not involve any commitment. However, there is a deadline: the result of the pre-assessment is valid for up to half a year, after which the banks will no longer accept it.