The ultimate guide to home loan pre-approval

When it comes to shopping for a property, home loan pre approval can give you the winning edge. It shows real estate agents that you are serious about buying a home and it places you in a good position to move quickly and get your financials sorted ahead of other buyers.

Although it is not a guarantee of how much you can borrow, a pre-approval gives a clear indication of what you can afford. Like any type of shopping, it helps to know in advance where you can safely buy and where you can only window shop.

There is no cost involved to obtain pre-approval and as your mortgage broker, we can guide you through the process, helping you to understand your borrowing capacity and the type of home loan that might suit.


Apply for pre-approval once you are ready to take the next step from inspecting and researching properties. Typically, pre-approvals only last 90 days so don’t apply for one until you are seriously considering purchasing.


The lender will ask you to verify your personal and financial details and provide evidence in the form of payslips, tax returns, bank statements and identification documents. You may also have to provide information about any outstanding debts.

To ensure a reliable and accurate pre-approval, be honest about any anticipated changes to your personal circumstances, such as a redundancy or starting a family.


Pre-approval is not a guarantee of finance from a lender so you will still have to obtain full (or formal) approval once you have found a property. It’s not until you have this final approval that the loan application is binding.

The benefit of having obtained preapproval is that it will significantly speed up the paperwork process.


Pre-approvals can be called conditional approval, indicative approval or approval in principle but their meaning is the same. Don’t confuse these with a ‘pre-qualification assessment’, which means a quick investigation of what you might expect to be approved for. It can be done over the phone or on the internet and is based only on the information you supply to the lender, so does not involve a credit check.


For more information, have a friendly chat with our team of brokers today, call us on 1300 652 842.