What is pre-approval?

Pre-approval (also called conditional approval) is a written commitment from a lender stating they would lend you up to a specified amount on terms specified in the document, subject to a small number of final conditions (the actual property, satisfactory valuation, no material change to your circumstances). Most pre-approvals are valid for 3-6 months.

Pre-approval lets you bid at auction or sign a contract confidently because the financing risk is largely resolved. Without it, a contract signed 'subject to finance' can fall through if the lender's full assessment comes back tighter than expected.

Pre-approval is not unconditional approval. The final approval at full application stage will re-check serviceability, valuation and the property security. A pre-approval can be revoked if your circumstances change materially (job change, new debt) between issue and full application.

conditional approval · preapproval · home loan pre approval