The process of buying a home can be overwhelming, especially if you’re a first home buyer. Getting conditional pre-approval can help remove a lot of the stress that comes with buying a home and applying for a home loan.
What is conditional approval?
Conditional approval is preliminary approval from a lender that shows you’re eligible to apply for a home loan within your borrowing power. Based on the information you provide, it gives you a clear idea of what a lender is willing to loan you, and what properties you’ll be able to afford.
What are the advantages of having conditional approval?
Getting conditional approval with a lender can help remove a lot of the stress that comes with buying a home and applying for a home loan. By having an indication of what a lender is willing to loan you, you can confidently focus your property search on homes within the price range, and in suburbs that you can afford.
How is it different to unconditional approval?
Conditional approval doesn’t guarantee your home loan application will be approved. Once you have found a property, and are ready to apply, lenders will complete a formal assessment to verify the information provided, and come back with unconditional approval if you meet their eligibility requirements.
How long does conditional approval last?
Conditional pre-approval timings can differ between lenders, but on average last between three to six months. If you need to extend your conditional pre-approval, make sure you speak to your lender before it expires.
Can I get a conditional approval from multiple lenders?
Yes, you can get approval from multiple lenders – approval aren’t legally binding – it doesn’t guarantee you’ll move forward with your application, or the lender will lend you the amount. If you’re considering getting approval from multiple lenders, be mindful of how this may impact your credit score.
What do I do after I have conditional approval?
Once you have pre-conditional approval, you can confidently search for your dream home and make offers, subject to unconditional approval. Ensure you speak to a solicitor or conveyancer to factor in any timelines and contingencies such as finance and/or pest and building inspections.
What happens if I'm rejected after receiving a conditional approval?
If you’re rejected by a lender and don’t receive conditional approval, don’t be disheartened. Make sure you take the time to discuss the reasons why you were rejected, and what changes you can make to ensure you have a better chance next time.
Learn more about buying a home and factors to consider here.
This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.