Mortgage Approval in Principle: Why Get It Before You Go Apartment Hunting
An approval in principle (pre-approval) is the bank's credit commitment to give you a mortgage on certain terms, provided you meet all the conditions, based on the information you submitted. Most people ask for one only after they've found an apartment. It's better to do it before.
What you need to know
The approval is free, and it doesn't obligate you to take the mortgage from that bank.
Its terms are guaranteed for at least 24 days, even if market interest rates change.
You can request approval from several banks and compare them. That's the basis for negotiating the interest rate.
Three advantages of getting approved before you search
A clear budget: You'll only go to see apartments that fit you, and save yourself time and disappointment.
Speed: When you find a good apartment, you can sign quickly, before other buyers do.
Bargaining power: A seller who knows your financing is ready treats you differently when negotiating the price.
What to submit
ID cards (Teudat Zehut) and bank account statements from recent months.
Salaried employees: pay slips from recent months.
Self-employed: tax assessments and an accountant's certificate.
Property details, or an estimate of the price of the apartment you're looking for.
It's not final approval yet
After the purchase contract is signed, the bank reviews the contract, the appraisal and the documents, and only then gives final approval. That's why the information you provide at the start has to be accurate. Want to find out first how much mortgage you can get? Or would you like me to submit your file to the right banks for you? Book an introductory call.
This article is for general information only and does not constitute personal advice.
