Pre-approval, also called conditional approval, is a lender's indication that it will lend you a certain amount, subject to conditions. In a competitive Sydney market it's close to essential: it tells you what you can spend and shows agents you're serious.
Not all pre-approvals are equal
Some lenders issue pre-approval automatically based on basic information, with little checking. Others have a credit assessor review your full application and documents. The second type takes longer but is far less likely to fall over once you've found a property.
Why approvals fall over
- Valuation shortfall. The lender values the property below the price, leaving a gap.
- Property type. Small units, unusual properties or certain postcodes may be outside the lender's policy. See our guide to apartment lending rules.
- Changed circumstances. A new job still on probation, a new car loan or a missed payment can all change the answer.
- Expired approval. Most last around 90 days.
How long does it take?
An automated pre-approval can take a day. A fully assessed one often takes several days to a couple of weeks, depending on the lender. Having your documents ready speeds things up.
Buying at auction
Auction purchases are unconditional, so there's no finance clause to protect you. Before bidding, confirm the property type suits your lender, get a building and pest report, and ask whether a valuation can be done before auction.
Ready to start? Learn about our pre-approval service or try the borrowing power calculator first.
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