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What is pre-approval?

Pre-approval, also known as approval-in-principle or conditional approval, gives you an idea of how much you might be able to borrow. Obtaining pre-approval before buying a home means you get the majority of the pesky paperwork out the way early and more importantly, helps you determine your price range so you’re ready with all guns blazing when you find the right home.

If you meet all the conditions your Home Loan Adviser will be able to give you an indication of how much you can borrow and the conditions that might apply, making the house hunting process much easier.

Why should I get pre-approval?

While it’s not a necessity to have pre-approval to make an offer, having it means you can place an offer on a home or bid at an auction knowing what your limits are. By not applying for it, you run the risk of putting an offer on a home, or worse winning an auction, to later find out you can’t actually afford it (and potentially losing a substantial amount of money in the process).

You’ve been busily saving for a deposit on your dream home but may have forgotten some crucial fees and charges. By applying for pre-approval, your Home Loan Adviser will let you know whether you can start shopping or if you still need to save a certain amount to reach your desired goal.

Pre-approval also gives you an added advantage during the home buying process as it shows the real estate agent and owner that you are serious about the home. Your offer will be taken into more consideration over someone who hasn’t gained pre-approval yet. Plus, by knowing exactly how much you can borrow, you will steer clear from properties outside your price range.

When should I get it?

Pre-approval is valid for 90 days, so you should be applying for pre-approval when you have saved enough for your deposit and all the other additional costs, and are seriously ready to splash that cash and buy a home. Once this time expires, a new credit check and new verifications are required to see if anything has changed since the approval date e.g. new liabilities or expenses.

How do I apply for pre-approval?

Before applying, use our borrowing calculator to estimate how much you can borrow. From here you'll be able to determine how much you can afford to repay each month. Also, take the time to research the different types of home loans available. If you’re not sure what the differences are, don’t stress; your Home Loan Adviser will be able to talk you through all your questions.

Once you have a clear idea of the big picture, your money is saved and you’re ready to start shopping, it’s time to complete your pre-approval application. Your financial position will be assessed including what you earn, what you own and what you owe (for example loans, credit cards, store cards, leases and other personal debts). You'll also need to provide a range of documents such as your recent payslips, group certificate, account statements and a range of identification (such as your driver’s licence, passport and/or birth certificate). 

How long does the pre-approval process take?

Pre-approval can take anywhere between two days to two weeks. To speed up the pre-approval process, make sure you have all the necessary documents and information you need when you complete the application. Check out our Home Loan Pre-Approval Checklist to find out exactly what you need.

What’s next?

If you’ve been successfully pre-approved, congrats! You'll receive a letter or email with your pre-approved loan amount and any special conditions that might need to be met (such as a building inspection). From here, the exciting part begins – home shopping. Get ready for weekends filled with open inspections and house auctions.

Once you’ve found your dream home and you’ve been successful with an offer, it’s time to provide your contract of sale and conveyancer details to your Home Loan Adviser to apply for unconditional approval, or in other words full approval. Keep in mind that if the settlement of your new home is taking place after the 90 day pre-approval period, then new verifications are required and a new Home Loan Needs Analysis needs to be completed to make sure your financial position hasn’t changed over the three months since you last applied. If all goes well over this period, then you’ve got yourself a home loan, and more importantly a new home!

Before getting pre-approval for a home loan, we always recommend talking to a Home Loan Adviser first. Their knowledge and expertise will put you in a great position to get started on your home buying journey. Our Mobile Home Loan Advisers will happily come and meet you at your home or workplace at a time that suits you. Or if you’d prefer to drop into any of our branches or advice centres, our team will be there to help find the loan that's right for you.


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