The importance of Home Loan Pre-Approval.

The search for the ideal home may be a long and difficult process. But what if you got lucky and stumbled upon the perfect property – in your ideal location – with an auction this weekend? If you hadn’t taken some steps to sort out your finances in advance, you might be struggling to get things together in time to snap up a great buy.
That’s why home loan pre-approval is the smart first move even if you’re just starting the process of buying a home. It’s a free service that allows a bank or lender to determine how much they would be prepared to lend you, based on what you can afford to repay. With pre-approval you can be prepared in advance to negotiate confidently on a property you find, rather than let somebody else snap it up before you.

Pre-approval clarifies your search

Without some type of pre-approval, you won’t have an accurate picture of your likely borrowing capacity, so you may be wasting time looking at properties outside your actual affordability price range. A pre-approval clarifies your realistic purchasing power, so you can better focus your search efforts.

The difference between ‘Conditional’ and ‘formal’ home loan pre-approval

A conditional pre-approval is a faster and simpler process to reasonably assess your expected borrowing capacity. Whilst it offers no guarantee of a loan amount, it’s a helpful guideline from a lender as to how much they are likely lend you subject to more complete documentation. This might be enough information to start your property search, but formal pre-approval goes further.
A formal pre-approval requires much of the same information as a full loan application. Details of your assets and liabilities, with documents such as pay-slips and bank statements give the lender your full financial circumstances, enabling them to make a firm, written commitment to lend up to your pre-approved limit. Whether you actually end up borrowing that full limit is up to you and you may well choose to borrow less, depending on your needs and financial goals.

Pre-approval speeds up the loan process

Once you’ve found and bought the right property, you’ll be busy enough planning to move, to redecorate, or to celebrate! If you’ve done the formal pre-approval, setting up the loan itself is far quicker and easier, so you’re free to concentrate on everything else at this exciting time!

Home loan pre-approval is free

It costs nothing to obtain a pre-approval, and you are not under any obligation to take up a loan or any specific amount with any lender. Most pre-approvals are valid for between three and six months, after which you’ll need to re-apply. This is to ensure any changes in your financial position are considered in the pre-approval limit.

Where do I go for Home-loan pre-approval?

Just where you go for pre-approval will depend on the type of loan and features you might need. At we can help you clarify your needs and determine what type of loan from which of our selected lenders will best suit your individual circumstances, and like a pre-approval our service is completely free.