Home loan pre-approval: what it is and when to get it
Home loan pre-approval is a lender's early answer on how much you can apply to borrow. Here is what it means, what it does not promise, and the five steps we suggest before you ask for it.
What home loan pre-approval means
A lender has looked at your finances and says you can apply for a loan up to a certain amount. It is a starting point, not the finish line.
Pre-approval usually lasts about three to six months, according to Moneysmart. It does not commit you to the loan, so you can still walk away or apply elsewhere.
It is conditional. Before final approval, the lender values the property you choose and checks your circumstances again.
So we treat pre-approval as a budget you have tested, not money in the bank. What you can actually borrow is settled later, by the valuation and the lender's final check.
Get it when you are ready to search seriously. Because it usually runs for three to six months, asking too early means it may lapse before you find the right home.
Five steps, in order
This is the order we suggest, so the pre-approval you ask for matches a budget you have already checked yourself.
Unsure what comes first?
Send us a general question about pre-approval. We are an information site, not a lender or a broker, so we cannot assess an application. To compare home loans, use the Contact page in the menu, where a licensed broker gets your details only with your consent.