Image of a real estate agent, wearing a navy blue suit, handing someone a house key

There’s a lot to think about when looking to buy a new home. Before you start looking at property listings, it’s worthwhile taking the time to understand your borrowing power and how much you may need to save for a house deposit.

One way of doing this is to get pre-approval (also known as conditional approval). There’s no point in looking at properties that are well beyond your borrowing capacity, so pre-approval can set you on the right path to purchasing your new home.

We’ve answered six of the top questions we receive on the topic of pre-approvals.

What is pre-approval?

Pre-approval is when a home loan lender agrees, in principle, to lend you money to purchase a home, without giving you final approval to go ahead.

It’s a way for the lender to let you know that you can apply for a loan and how much you can afford, so you have the confidence to put offers on homes when you’re ready. One thing to note is you aren’t obliged to go ahead with the lender you receive the pre-approval through.

It’s important to remember that factors such as your income, credit score and savings can influence the final amount you can borrow. Check out our home loan borrowing power calculator to help you get started.

Do I need pre-approval?

In a hot market, real estate agents often require a pre-approval before you can make an offer to give the seller confidence you can afford the home when they’re reviewing multiple offers.

Make sure you’re ahead of the game by having your pre-approval ready. Not only will this put you in good stead with the seller, it will also mean you know how much you can spend before you start viewing properties, which saves you time and effort.

How do I apply for pre-approval?

Our experienced home lending team can help you to obtain pre-approval. To get started, request an appointment with one of our mobile lenders. To grant pre-approval we need to fully understand your financial situation. To help us do this, please bring all your relevant documents and personal information as guided by your home loan specialist to your meeting.

How long does a home loan pre-approval last?

A home loan pre-approval lasts 90 days, which allows enough time for you to find your new home and have an offer accepted.

Am I guaranteed to be able to borrow the amount that I receive pre-approval for?

It’s important to remember that a pre-approval isn’t a guarantee that you can definitely borrow the amount the lender has given you pre-approval for. This is why we strongly encourage you to provide a really good snapshot of your financial situation when applying for a pre-approval, so you can get the best idea of approximately how much you could borrow.

Remember, you should never sign a contract or assume your finance will be approved until you receive formal approval from a lender.

What is the home loan approval process?

Generally, home loan applications take approximately one to two weeks to process, depending on the complexity of the loan. This provides enough time for a valuation of the property if needed and validation of all required documentation.

Make sure you seek professional advice to understand how much you can afford and what your borrowing power might be if it’s your first home loan. To get started, chat with one of our mobile lenders.

Important information

Banking and Credit products issued by Police & Nurses Limited (BCU) ABN 69 087 651 876 AFSL/Australian Credit Licence 240701. Any advice does not take into account your objectives, financial situation or needs. Read the relevant Product Terms and Condition, before acquiring this product in considering and deciding whether it is right for you. The Target Market Determination (TMD) for products is available on request. Lending criteria, terms & conditions, fees & charges apply.