What’s the Best Way to Get a Pre-Approval: And Why It Matters

What’s the Best Way to Get a Pre-Approval: And Why It Matters

If you’re planning to buy a property—whether it’s your first home or an investment—pre-approval is one of the most important early steps. It gives you a clear idea of your borrowing power and helps you move quickly and confidently when the right opportunity comes along.

But not all pre-approvals are created equal. If you approach it the wrong way, you could risk delays, missed opportunities, or even loan rejection at the final stage. Understanding how pre-approval works, and what lenders look for, can help you get it right the first time.

Why Pre-Approval Matters

Some buyers make the mistake of searching for properties before confirming their finance. This can lead to frustration if the bank later declines their loan or offers less than expected. Pre-approval helps you avoid these issues by:

• Clarifying your budget: You’ll know what you can afford, saving time and avoiding disappointment.

• Strengthening your offer: Sellers and agents take you more seriously when you already have pre-approval in place.

• Moving quickly when needed: You can act fast and make an offer with confidence.

• Identifying issues early: Any credit, income, or documentation issues can be addressed before making a purchase.

Tip: A seller is more likely to choose a buyer with pre-approval over one without, especially in competitive markets.

Step-by-Step: How to Get a Pre-Approval

Getting pre-approved isn’t difficult, but it does require preparation. Here’s how to approach it:

• Check your credit score: A strong credit history improves your chances of approval and may result in better loan terms.

• Assess your borrowing capacity: Look at your income, living expenses, debts, and the deposit you’ve saved.

• Gather your documents: Most lenders require proof of income (e.g. payslips or tax returns), recent bank statements, identification, and details of any existing loans.

• Choose a lender or broker: A mortgage broker can compare multiple lenders and help you find the right fit based on your situation.

• Submit your application: This can be done directly or through your broker. Ensure all documents are included to avoid delays.

• Wait for conditional approval: This usually takes between a few days to two weeks, depending on complexity and lender processing times.

Tip: Pre-approvals generally last between 3–6 months. They’re conditional, not guaranteed—your financial position will be reassessed before the final approval.

Common Pre-Approval Mistakes to Avoid

It’s easy to assume that pre-approval means your loan is locked in, but there are a few common traps that can affect your final approval:

• Submitting incomplete documents: Missing or outdated paperwork can slow things down or result in rejection.

• Changing jobs or income sources: Lenders reassess your financial situation before settlement, and major changes can impact your approval.

• Taking on new debt: Avoid large purchases or credit increases while you’re house hunting.

• Overlooking pre-approval conditions: Some lenders apply restrictions on property types, suburbs, or other factors—always read the fine print.

• Relying on one lender: Different lenders have different policies. It’s worth comparing your options to ensure you’re getting the right deal.

Tip: Until settlement is complete, it’s best to avoid any financial changes that could alter your borrowing position.

What Happens After Pre-Approval?

Once you’re pre-approved, you can start looking for properties within your budget. When you’ve found the right one, the next steps include:

• Finding a property that fits your budget: Stay within the limits of your pre-approval to avoid complications.

• Finalising your loan: After your offer is accepted, the lender will reassess your application and issue formal approval.

• Property valuation: The lender will conduct a valuation to confirm the property’s value before proceeding.

• Signing the loan documents: Once approved, you’ll complete the paperwork and prepare for settlement.

Tip: Even with pre-approval, loan offers can change based on property type, market conditions, or your updated financial position.

Bringing It All Together

Pre-approval isn’t just a box to tick—it’s a key step to buying smarter, avoiding delays, and improving your position as a buyer. It helps you move with clarity and confidence while reducing the risk of surprises along the way.

While PropVest focuses on property investment strategy, having the right finance structure is critical. Book an investment session with PropVest and let’s ensure your property goals align with the right financial approach.

Disclaimer: This article is for general information only and does not constitute financial, legal, or lending advice. You should seek advice from a qualified professional before making any property or investment decisions.