A pre-approval from GetGo Home Loans takes your current financial situation into account in order to calculate how much additional debt you could take on to finance a new home.
A pre-approval looks at your:
- Net income: this is your salary that gets paid into your bank account, and you should be able to show that you’ve earned it regularly. If you have other income sources that would make paying off additional credit easier, ensure you make a GetGo Home Loans consultant aware of them (and provide documentation thereof – e.g. a rental agreement if you own a property that you rent out).
- Existing debt repayments: e.g. vehicle finance, a personal loan, store credit etc. You are contractually obligated to pay instalments on these monthly.
- Non-discretionary expenses: essential living costs such as rent and other housing costs, fuel, school fees, insurance etc.
- Other discretionary spend: This is defined as a want as opposed to a need, e.g. entertainment or travel. These can also be seen as “the extras, not the essentials” (and things you can cut down on if you want to buy a home).
It then looks at how much of your remaining income you can responsibly afford to spend on more credit and calculates what size home loan you could qualify for with a bank. Lastly, it will tell you what the monthly instalment on this amount could be.