Buying property
Should I get home-loan pre-approval before making an offer?
What pre-approval tells you, what it does not guarantee and when to arrange it.
Short answer
Pre-approval is sensible before you make serious offers because it gives you an indicative borrowing limit and can reveal application issues early. It is not unconditional approval, so finance should not be treated as guaranteed until the lender completes its checks.
What can still change
Final approval normally depends on the property, valuation, contract and updated financial information. A lender can reassess if your income, debts, expenses, credit record, rates or lending policy change.
- Check the expiry date and conditions on the pre-approval.
- Avoid new debts or credit-card limits before settlement.
- Confirm the property type is acceptable to the lender.
- Obtain legal advice before waiving a finance condition.
When to arrange it
Apply when you are ready to search within a realistic price range. Moneysmart notes that pre-approval commonly lasts three to six months, but the exact validity and conditions are set by the lender.
Conditional and fully assessed pre-approval
Not every pre-approval involves the same review. Some are system-generated indications based on entered data, while others involve a credit assessor checking documents. Ask what has actually been verified and read every condition. Even a fully assessed pre-approval normally remains subject to an acceptable property and valuation. A useful pre-approval should identify outstanding documents or policy conditions, not simply display a borrowing number without explaining what could still prevent formal approval.
The property can still be declined
Lenders may restrict very small apartments, unusual titles, serviced apartments, high-density postcodes, significant building defects, rural properties or properties with commercial use. A contract price also does not guarantee the same valuation. Send the property details to the lender or broker before making an unconditional offer where possible. Building and pest inspections, strata records and legal review address different risks and remain important even when finance appears straightforward.
Keep the approval current
Tell the lender or broker if you change jobs, become self-employed, take parental leave, increase a credit limit or obtain another loan. Continue saving and avoid moving the deposit without a clear record. If pre-approval expires, updated payslips, statements and a new credit assessment may be required. Before auction bidding, confirm the approval amount, available funds and likely property acceptability again. Auction contracts are commonly unconditional, so obtain legal advice about the risk before bidding.
Questions to ask before you proceed
- Which approval conditions and property checks are still outstanding?
- How much cash is required for the deposit, purchase costs and a sensible buffer?
- Does the lender have restrictions on this property type, title, size or location?
Key takeaway
Use pre-approval to shop with a clearer limit, while keeping appropriate finance protection in your contract.
Official guidance: Moneysmart: Buying a house
This is general information, not personal financial, tax or legal advice. Lending criteria, fees and eligibility vary.
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