What comes first? The property or the loan?

What comes first? The property or the loan?

Intro If you’re looking to negotiate your property purchase from a position of strength, the first step is to arrange preapproval of your finance.


Purchasing property is an exciting time, particularly if you’ve done your homework and know what you can reasonably afford. That’s why property shopping before you’ve organised your finances is the financial equivalent of putting the cart before the horse.

While loan applications may seem an unappealing prospect, compared to “house hunting,” getting a clear picture of what type and size of loan you are eligible for as well as what monthly commitment you are looking at will save you from any nasty surprises and unwelcome disappointment.

Getting preapproval from a lender gives you a degree of certainty that when you make an offer to buy you have been assessed as being able to afford the purchase and the loan repayments and that you have met relevant credit assessment criteria.

This not only gives you confidence but signals to the agent and the vendor that you are serious about the purchase and give them a degree of confidence that the sale will not fall through.

As well as giving you a level of certainty about your purchasing decision, there is one other practical reason to obtain finance prior to purchase. If you enter into a contract of sale and then are unable to obtain finance, you could lose the deposit you have made to secure the property (This is usually 10%).

It is a risk that adds extra stress to the process and makes everything feel rushed. In this atmosphere it is very easy to choose a loan that is not necessarily the most suitable for your circumstances.

If you’re serious about purchasing a property, then the first step that you should take is to call the team at Australian Finance Hub and arrange for them to obtain finance for you. Then you can go house shopping with confidence.