Home Loan Pre-Approval: Know Your Position Before You Offer

A home-loan pre-approval gives you an indication that a lender may be prepared to lend up to a stated amount, subject to conditions.

It can help you establish a price range, understand the likely deposit and prepare for open homes or negotiations. It is not final approval and it does not mean every property within the price range will be acceptable to the lender.

What a lender may assess at pre-approval

• Income and employment

• Living expenses and dependants

• Credit cards, loans, HELP debt and other commitments

• Credit history

• Deposit and available funds

• Likely loan amount and repayments

• The lender’s serviceability and credit policies

What still needs to happen

After you find a property, the lender will generally need the signed contract, an acceptable valuation and confirmation that the property fits its policy.

It may also re-check your income, debts, expenses, credit file and application details, particularly if time has passed or your circumstances have changed.

Why a property can affect final approval

• The lender’s valuation is below the purchase price

• The property is very small or has a non-standard layout

• The title, zoning, location or use is outside lender policy

• The building has defects or requires major work

• The purchase price exceeds a government-scheme cap

• A construction or off-the-plan contract does not meet required timing or conditions

What not to change without checking

While house hunting, avoid making significant financial changes without first checking the effect on your approval.

That includes taking out car finance, increasing a credit-card limit, opening buy-now-pay-later accounts, changing jobs, reducing work hours, spending part of the deposit or becoming a guarantor for someone else.

Even a new credit enquiry can prompt questions. If a change is unavoidable, tell your broker early so the assessment can be updated before you commit to a property.

How long does pre-approval last?

Many lender pre-approvals are valid for around 90 days, although the period and renewal requirements vary.

Under the Australian Government 5% Deposit Scheme, a buyer generally has 90 days after pre-approval to find a property and sign a contract. The lender should confirm the relevant expiry date and any extension process.

Before making an offer

1. Send your broker the property address and proposed price.

2. Check that your deposit and costs still fit the price.

3. Confirm whether a government-scheme property cap applies.

4. Ask your solicitor or conveyancer to review the contract.

5. Understand the finance clause, cooling-off period or auction conditions before committing.

Pre-approval FAQ

Does pre-approval affect my credit file?

A formal application may involve a credit enquiry. The process varies by lender, so ask before multiple applications are lodged.

Can I bid at auction with pre-approval?

Pre-approval can help, but auction contracts are generally unconditional. Confirm the lender, property, funds and legal position before bidding.

What if my pre-approval expires?

The lender may require updated payslips, statements, expenses and another assessment. Start the renewal before the expiry date if you are still house hunting.

Should I use my maximum approved amount?

Not necessarily. Compare estimated repayments and ownership costs with your preferred monthly budget, rather than treating the maximum as a target.

Know the numbers before you fall in love with a property

Tell me where you hope to buy, your timeframe and approximate savings. We can work out whether planning, an initial assessment or formal pre-approval is the right next step.

Call Lauren on 0458 053 943 or use the “Speak to us today” button to discuss your pre-approval.