Guide · Loan basics
How to Get Home Loan Pre-Approval (and Why It Matters)
Pre-approval is what turns you from a browser into a buyer. It tells you your real budget, and it tells sellers and agents you're serious. Here's how to get it, what it does and doesn't mean, and how to keep it solid until you find the place.
Pre-approval, sometimes called conditional approval, is a lender's in-principle agreement to lend you up to a certain amount, based on your income, expenses and credit, before you've found a property. It's not a full unconditional approval, because the lender still needs to assess the specific home you eventually buy. But it gives you a reliable budget and real credibility when you're making offers or bidding at auction.
Why it's worth doing before you shop
- You know your real ceiling. No more guessing or falling in love with something you can't finance. Pair it with the borrowing power guide to understand the number.
- Agents take you seriously. A pre-approved buyer is a safer bet than someone still working out their finances, and it can matter in a competitive negotiation.
- You can bid at auction. Auction purchases are unconditional, so you really don't want to bid without knowing your finance is lined up.
- You move faster. When the right place comes up, you're ready to act instead of scrambling.
What you'll need to provide
The exact list depends on your situation, but for most employed applicants it looks like this. Having these ready makes the whole thing faster and smoother.
- Photo ID, such as a licence and passport.
- Your last two or three payslips, and sometimes a letter from your employer.
- Recent bank statements showing your income, savings and spending.
- Statements for any existing debts: credit cards, car or personal loans, HECS.
- Evidence of your deposit and any gift or grant that forms part of it.
This is where a broker saves you grief
Every lender assesses income and expenses a bit differently, so the right pre-approval starts with picking the lender most likely to say yes to your profile at the amount you need. That's my job. I package your application so it's assessed properly the first time, rather than scattering applications and denting your credit file.
How long it lasts, and keeping it valid
Pre-approval typically holds for around three months, though it varies by lender and can often be renewed if your search runs long. To keep it solid, don't rock the boat in the meantime. Avoid changing jobs if you can help it, don't take on new debts or open buy-now-pay-later accounts, and keep your spending steady. A big change to your finances can mean the lender re-checks everything, and you don't want a surprise when you're about to make an offer.
Pre-approval is not a guarantee
It's conditional. The lender still has to be happy with the actual property, its valuation and your circumstances at the time of the full application. Most pre-approvals convert smoothly, but treat it as a strong green light, not an unconditional promise, and always keep your finance conditions in a purchase contract unless you're at auction.
Getting pre-approved properly is one of the most useful things you can do before you start seriously looking, and it costs you nothing to sort out with me. If you're a first home buyer, it fits neatly alongside the first home buyer page and working out your deposit.
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Let's get your pre-approval sorted so you know your budget and can move the moment the right place appears.
Frequently asked questions
How long does home loan pre-approval take?
Once your documents are in, it can range from a day or two to a couple of weeks, depending on the lender and how busy they are. Having your payslips, bank statements and ID ready up front speeds it up a lot. A broker can also steer you to a lender with quicker turnaround times if you're on a deadline.
Does pre-approval affect my credit score?
A pre-approval usually involves a credit enquiry, which can nudge your score slightly. One is minor. The problem is applying to several lenders at once, which leaves multiple enquiries and can look like you're being knocked back. That's a big reason to work with a broker who targets the right lender the first time.
How long does pre-approval last?
Usually around three months, though it varies by lender and can often be renewed if you haven't found a property yet. To keep it valid, avoid changing jobs, taking on new debts or big shifts in your spending, because a material change can prompt the lender to reassess before it becomes a full approval.
Important information
This information is general in nature and does not take your personal objectives, financial situation, or needs into account. It is not credit assistance or a recommendation to enter into any particular credit contract. Consider whether it is right for you and seek advice before acting. Lending is subject to a lender's eligibility and approval criteria. Terms, conditions, fees, and charges apply.
Greenwood Finance · ABN 23 671 049 693 · Credit Representative No. 551942.
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