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Understanding pre-approval

If this is your first time buying, pre-approval might be a new concept to you. Here’s how it works.

The vast majority of buyers will (at some stage) approach a bank or lender for a home loan. As a buyer, you’ll be asked to provide certain information about your income, etc to prove you can comfortably repay your loan over time. Once your loan is approved, the deal on the house is done and money is exchanged.

In a nutshell, pre-approval means that you’ve spoken to a bank or lender and have provided all the required information, and you’ve been approved to borrow a set amount, if and when you find a property you’re ready to buy.

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What are the advantages to securing pre-approval for a home loan?


Fear of missing out is never felt so acutely as the moment you lay eyes on the perfect property to suit your needs. Pre-approval lets you take action and lock it down on the spot.

2. Obligation-free

Once you secure pre-approval, you may not find exactly what you’re after in a property for some time. No worries – you can easily renew your pre-approval and continue your search.

3. Pick Me!

If you enter into negotiations with a seller, and they’re weighing up their options between two identical offers, knowing you’re pre-approved may tip the balance in your favour.

How the approval process works

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When you are ready to start searching, contact your local branch or apply online and a lender will contact you. Our lending experts will be able to let you know how much you can borrow, after assessing your income and commitments.

A “Conditional Loan Approval” (subject to valuation) will be issued, and this is a great real estate negotiating tool, as you have already checked your borrowing capacity. It’s worthwhile before you start searching for properties to organise a conveyancer/solicitor.

Start your search

Start looking! Once a home is found, simply contact your lender who will confirm your income/commitment details and organise for a valuation to be undertaken on the property.

Once a favourable valuation is received, your loan is sent for approval. Once your loan is approved, the exchange can take place. Settlement is normally around 6 weeks (although can be sooner or later if both parties agree).

Your questions answered

How long does pre-approval for a home loan take?

Everyone's circumstances will be different, but for simple applications, it can be as quick as 2 business days. Between 3-5 business days is fairly standard in terms of time-frame.

For more complex applications, it can take up to two weeks before you may receive pre-approval. Check with your lender when having your initial conversation to get a guideline and avoid disappointment. 

Does pre-approval guarantee a home loan?

No, unfortunately getting pre-approval doesn't 100% guarantee you a home loan. There are factors that may come into play that may mean you get declined for a loan, even if you previously gained pre-approval.

For example, since getting pre-approval, there may have been a change in your circumstances that impacts your financial position and favourability as a loan candidate.

How does a pre-approval home loan work?

Home loan pre-approval in a nutshell is an initial assessment from a lender where they agree, in principle only, to lend you a certain amount of money to buy a property.

A mortgage pre-approval essentially serves two purposes:

  • It establishes your financial position with the lender and yourself
  • It indicates just how much a lender will lend you, and what type of house you can afford to buy.

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*Conditions, fees and charges apply to all loans. Subject to meeting Greater Bank's lending criteria.

Greater Bank, part of Newcastle Greater Mutual Group Ltd ACN 087 651 992 Australian Financial Services Licence/Australian credit licence 238273 

++$2,000 cashback for loans ≥$250,000 or $2,500 cashback for loans ≥$500,000. Only one (1) Cashback Payment per eligible loan, and for first eligible loan only. Not available in conjunction with any other promotional payment. Offer may be varied or withdrawn at any time. See the full Cashback Offer Terms and Conditions. Terms, conditions, fees, charges and credit criteria apply.

~At the end of the fixed rate period customers can chose to re-fix their loan for another fixed rate period or let the loan revert to the applicable variable interest rate based on the loan and repayment type.

^Comparison rate is based on $150,000 over 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

#Discounted rates include a discount on Home Loans of $150,000 or over and for owner occupied Home Loans with an LVR 80% or below and for investment Home Loan with an LVR 80% or below and apply to new borrowings only. Discounted rate not available for Line of Credit facilities.

+Additional costs may apply if your loan has a fixed rate.

All new interest-only home loans, attract a 0.10% p.a. margin above the applicable Principal and Interest base rate. All new Line of Credit home loans, attract a 0.10% p.a. margin above the applicable Line of Credit base rate. The all-up interest rate which includes any margins, will be set out in your credit contract. View our Terms and Conditions.

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