Getting pre-approved for a home loan

Pre-approval is the moment you stop guessing your budget and start house-hunting with a number a lender has actually looked at. It is not a guaranteed loan, but it tells you — and every agent you deal with — roughly how much you can borrow, so you can make an offer with confidence. This guide frames what pre-approval is, how a broker fits in, and what you need to pull together to get one, then points you to the detail for each.

Key takeaways

• Pre-approval is conditional, not final: it is a lender's signal of how much they'd lend, subject to a valuation and final credit check.
• A broker widens your options: a broker compares loans across many lenders; a bank can only sell you its own products.
• Paperwork is the bottleneck: the faster you assemble a complete document pack, the faster you get a decision.
• Pre-approval has a shelf life: it lapses after a set period, and you re-submit current documents if it does.
• Get it before you fall in love with a place: a number in hand keeps you from committing to something you can't fund.

1. What pre-approval actually is

Pre-approval — sometimes called conditional approval — means a lender has looked at your finances and indicated they'd lend you up to a certain amount. It is a signal, not a settled loan. It helps to keep three stages straight: pre-approval (your finances checked, subject to a satisfactory valuation and final credit check), unconditional or formal approval (after your offer, once the lender has valued the property and is ready to fund), and settlement (the loan is drawn and the property is yours). Pre-approval also has an expiry — it typically lasts around three months with the major banks, and if it lapses you re-submit current documents. The documents-for-pre-approval explainer covers the current timeframes.

Not all pre-approvals are equal

2. Broker or straight to the bank

You can apply directly to a bank, or go through a mortgage broker — a licensed credit professional who runs the application through for you. A broker compares loans across many lenders at little or no direct cost to you, while a bank can only offer you its own products, so the trade-off is mostly about choice and legwork. For the full picture, read what a mortgage broker does.

3. What you need to get pre-approved

Lenders want a pile of paperwork before they'll commit to a number, and the faster you assemble a complete pack the faster your broker can lodge it. In practice they want proof of your identity, your income, a savings history and your existing debts — plus extra tax paperwork if you're self-employed.

The full checklist, including point values and edge cases, is in documents for pre-approval.

4. What slows a pre-approval down

• An incomplete document pack: the single most common cause of delay — a missing statement holds up the lot.
• Unexplained deposit funds: lenders want to see where the money came from; a large unexplained transfer raises questions.
• Undisclosed debts: buy-now-pay-later and HECS count, and surfacing them late resets the clock.
• Letting it lapse: an expired pre-approval means re-submitting current documents before you can act.
• Treating it as a guarantee: the property still has to value up and pass a final check.

5. Questions to ask

• How much can I realistically borrow, and how much deposit do I need?
• How long will this pre-approval last before it lapses?
• Which lenders on your panel suit my income and situation?
• What exactly is still conditional once I have pre-approval?
• What documents are you still waiting on from me?