A lender generally reviews your financial position before issuing pre-approval. The depth of that review, conditions and validity period can vary, so it is important to understand exactly what has and has not been assessed.
What is home loan pre-approval?
Pre-approval is an indication that a lender may be prepared to lend up to a stated amount, subject to its conditions and a later assessment. It can help you discuss a realistic budget and demonstrate that finance preparation has started.
It does not guarantee that the lender will approve a particular property, loan structure or final application. The lender may still need to verify information, complete a valuation and confirm that its policy has not changed.
How to prepare for pre-approval
- Current identification and contact details
- Recent payslips or suitable income evidence
- Bank statements and evidence of savings
- Details of credit cards, loans and other liabilities
- A realistic summary of household expenses
- Deposit amount and source of funds
Self-employed applicants may need business and personal financial records. See the Home loan application checklist for a broader preparation list.
Conditions and limits to check
Ask whether the pre-approval involved a full assessment or an automated indication, how long it remains valid, and what must happen before formal approval. Common outstanding matters can include an acceptable property, valuation, updated income evidence, satisfactory account conduct and no material change in circumstances.
A purchase contract should be reviewed by an appropriately qualified legal professional. Do not assume pre-approval removes the need for a suitable finance clause or independent legal advice.
Changes that may affect the assessment
- Changing jobs, employment status or working hours
- Taking on a new loan, credit card or buy-now-pay-later facility
- Using part of the deposit or increasing regular expenses
- Changes to dependants, residency status or living arrangements
- Missed repayments or changes in account conduct
- Purchasing a property outside the lender's acceptable criteria
Tell your broker promptly about changes rather than waiting until formal approval is required.
What happens after you find a property?
- Provide the signed contract and property details.
- Confirm the proposed loan amount and available funds.
- Complete any outstanding documents or updated checks.
- Allow the lender to assess the property and order a valuation where required.
- Review formal approval conditions before proceeding to settlement.
Pre-approval dates and lender requirements vary. The Australian Government's Moneysmart home-buying guide provides additional general information.
Return to the Home loan and finance guides, explore Residential lending support, or book a consultation.