What you need to know about home loan pre-approvals

Before making an offer on a property, it’s a good idea to get a pre-approval for a home loan. A pre-approval, also known as conditional approval, indicates that a lender is willing to lend you an amount of money to buy a property. Here are five key things to know about a pre-approval.

1.    A pre-approval tells you what you can afford

From a buyer’s perspective, knowing how much you can borrow from a lender gives you an idea of what you can afford. It means you can focus your search on properties within your budget and not waste time on unaffordable properties.

2.    A pre-approval lets you buy with confidence

With a pre-approval, you can make an offer or bid at an auction with confidence. Agents and sellers will also see you as a serious buyer and are more likely to accept your offer. As a result, you may have more negotiating power over a buyer who doesn’t have a pre-approval.

3.    A pre-approval isn’t a guarantee

A pre-approval means you currently satisfy a lender’s requirements for a loan, but it is not set in stone. After your offer is accepted, a lender will assess your financial circumstances, and they may reject an application if your situation changes and you no longer meet their requirements. Changes include switching jobs, reduced income or savings, and increased debts. Lenders will also assess the value of the home you intend to buy.

4.    A pre-approval gets some of the paperwork out of the way

A pre-approval application requires you to get your paperwork in order, which saves you time and stress down the track. When it’s time to get formal approval (also known as unconditional and full approval), most of the hard work is done already.

5.    A pre-approval has an expiry date

Generally, a pre-approval lasts around three months, but it can vary from lender to lender. If it expires and you haven’t found a property, you’ll need to apply for another one.

If you’re looking to secure a pre-approval, we can help you with the process. Get in touch with us today.


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1. Any financial advice is provided by Dominium Capital Financial Advisers Pty Ltd, an Authorised Representatives of Dominium Capital Pty Limited (ABN 54 513 176) 674 AFSL 461653
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3. General Advice Warning – The information provided is general advice only. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.