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Now that you have read What is a pre-approval and do I need one? and you have decided to proceed, it is time to engage directly with a lender or a broker. If you are not sure on the benefits, I suggest you read Why choose a broker for your pre-approval?
Before we cover the fees associated with a pre-approval, it is important to understand how brokers get remunerated. Lenders pay brokers a commission based on the settled loan amount. Meaning, if a client doesn’t end up purchasing a property and the loan never settles, the broker doesn’t get paid. Over the past few years, regulation and lending criteria has tightened significantly meaning an increasing amount of work needs to go into researching your lending options and applying to the lender on your behalf.
With this in mind, and a desire to be a sustainable business that can help our clients for many years to come, we need to adjust how we get paid so that we can help those who want and need it, even if a client never proceeds with a purchase.
Here is our fee structure for pre-approvals:
- $0 Upfront
- We do not charge anything for researching/presenting your options and lodging an application on your behalf.
- $490 Extension fee
- Your pre-approval will expire after 6 months. If you wish to extend this pre-approval (with the current lender or re-submission through a new lender) this fee will be charged. Extensions are required if people have been actively searching but haven’t been successful in securing a property during that 6-month window.
- $1490 Withdrawal fee
- This will be charged if you decide not to proceed with your application at any time after pre-approval is granted. This will be charged at the 6-month expiry if you do not extend your pre-approval. This may be relevant if you change your mind about purchasing a property, have secured finance elsewhere, or a change in situation means an imminent purchase is no longer likely.
Simply put, if you submit a pre-approval application and you purchase a property within 6 months, you will not be charged any fees. However, if you need to extend or withdraw your application the above is applicable.
We understand that buying a house is a huge thing and some people will take more than 6 months to purchase. The above fees are to ensure we can support you as much as required throughout this process whilst making sure our business is sustainable.
Remember, if you have any queries, please make sure to reach out to your Rising Tide Lending Specialist.