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Everyone has heard the old saying “timing is everything”, and in the context of property investment the adage tends to ring resoundingly true. In the competitive world of real estate it is often the case that attractive purchase opportunities pop up unexpectedly, requiring purchasers to take quick and decisive actions to secure properties. 
However, having been in the mortgage industry for over 12 years, I have been privy to many situations where purchasers have lost out on dream properties after being beaten to the punch by better-prepared buyers.
In light of this, it is important for investors to plan ahead as much as possible to ensure that they are able to take advantage of chance investments as they arise. 
One way to do this is to obtain pre-approval for finance from a lender – something that not only enables purchasers to act quickly once opportunities have been identified, but also helps them to ascertain their borrowing capabilities early on in the search process. 
In addition to enabling an investor to narrow the property search within a purchase budget, loan pre-approval could also provide increased price bargaining power with vendors, who might be willing to accept a lower price than was advertised with the knowledge that the transaction is already backed by secure finance – particularly in cases where a vendor is looking for a quick and hassle-free sale. 
The amount an applicant can borrow will vary from lender to lender and will depend on a number of different factors, including a borrower’s income, credit history, existing assets, debt and equity, as well as the property type and any rental income/s that are expected from it. 
Applicants will need to produce a variety of original documents, which should be gathered in advance to save time. These include, but are not limited to, identification documentation, pay slips, group certificates, bank statements, loan details, and insurance and superannuation policies. 
In regards to experienced investors: many often believe that because they have gained finance approval in the past that they will automatically be granted the same in the future. It is important to note, however, that this assumption is incorrect, as the lending criteria of banks changes constantly, meaning that investors can cease to qualify for loans despite their situations remaining unchanged. 
In many cases loan pre-approval will reveal that an investor has greater access to finance than initially thought. And by defining this range with a mortgage broker from the outset, interested buyers can considerably boost their position within the marketplace, improving their ability to act swiftly and secure attractive property investments as they arise. Leverage yourself in negotiations by being ready to fire.
Harry Bozin is a director at <a target="_blank" href="https://www.century21homeloans.com.au/loantype.cfm">Century 21 Home Loans WA</a>
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Why you should secure finance pre-approval before looking for property

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Most people are familiar with the phrase “knowledge is power”, and for investors who might be looking to expand their asset portfolio, it often pays to remain up-to-date regarding the market values of properties. Not only can this knowledge help to inform decisions about whether or not to grow a property portfolio, but it can also assist in determining how to finance such acquisitions.
For many investors, the concept of unlocking property equity to finance additional acquisitions is becoming increasingly attractive – largely due to the liquidity, flexibility, taxation and capital growth benefits that can often result from such.
In real estate terms, equity is the difference between the current market value of a property and the amount owing on that particular property. For example, if a home is worth $700,000 and the owner owes $300,000 on a mortgage, he or she has $400,000 worth of equity.
Depending on the personal credit circumstances of the owner, he or she may be able to use a proportion of their equity to undertake renovations, refinance the mortgage or purchase additional investment properties.
It is important to note that property equity is not fixed, but rather can change according to market conditions; that is, when a property’s market value fluctuates, so too does the proportion of equity invested in it. With this being the case, the ability to use property equity as a source of investment finance will be largely dependent on the degree of equity that actually exists within a property at a particular point in time.
As equity and borrowing capacity are inextricably linked, unless an investor has an up-to-date knowledge of how much his property is worth and how much equity he can access, he cannot properly harness his portfolio-expansion prospects.
 
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Take, for example, an investor who has been steadily paying off his property portfolio (consisting of several properties) for a number of years. Over this period many prime buying opportunities may have come along – however, if the investor has not remained up-to-date on the market values and equity proportions within their properties, it is possible that he will have not considered, let alone taken advantage of, potentially fortuitous acquisitions. 
Without knowledge of what you have now, it will be difficult to know what you are able to do in the future.
It is for this reason that annual market appraisals can be a powerful tool for property investors; they can enable an investor to remain informed of the available equity in each of their properties, consequently giving them a clearer understanding of their own financial position and current ability to make further acquisitions.
Despite the wealth of knowledge that most seasoned property investors have about the real estate market, many will remain unaware of potential sources of finance that may be sitting directly under their noses. A key way to combat this is to have an annual market appraisal – something which will enable you to gain a good idea of how much property equity you might have access to. Doing this, in conjunction with a mortgage capacity check, will place you in a better position to assess your property portfolio expansion prospects, and to be able to act quickly to secure investment opportunities, should you wish to do so.
You might not be ready to buy at the moment – however, through knowing what you can afford, you can begin looking at investment opportunities – ready and able to pounce.
Harry Bozin is a director at <a target="_blank" rel="nofollow" href="https://www.century21homeloans.com.au/loantype.cfm">Century 21 Home Loans WA</a>
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Harry Bozin

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