Thinking about buying your first home but not sure where to begin? Start with pre-approval. It might not be the most exciting step, but it’s arguably the most empowering. And no, it’s not a commitment to a loan. It can give you more clarity when you start searching and help you feel more confident about your price range.
What Is Pre-Approval and Why Does It Matter?
In simple terms, home loan pre-approval (also called conditional approval) is a lender saying, "Based on what we see, you’re likely to be approved for a loan up to this amount", and is a lender indicating, based on the information provided, an indicative borrowing amount subject to full assessment. It’s not a guarantee, but it can help you understand your likely borrowing range and may assist when planning or preparing to make offers, noting that it is not a commitment to lend.
With pre-approval, you’ll know:
- How much you can borrow (realistically)
- What your repayments might look like
- Which properties are actually in your price range
And that means fewer heartbreaks falling for places you can’t afford, or missing out because you weren’t ready to act.
Benefits of Getting Pre-Approved Early
Whether you're looking in Sydney, Brisbane, or regional Victoria, the property market moves fast. In competitive markets, having your finances organised can make the process smoother and demonstrate your preparation to agents and sellers.
Pre-approval gives you:
- Confidence to start house hunting
- Credibility when making an offer
- Clarity around your borrowing power
It also helps you get ahead of common first-home buyer anxieties; like "What if the bank says no?" or "What if I spend too much?"
What Pre-Approval Isn’t (And Why That Still Matters)
Let’s be clear: Pre-approval is not formal approval. You’ll still need to go through full assessment once you’ve chosen a property, including property valuation, updated income/expense checks, and contract review.
But going ahead without pre-approval can make the process more uncertain for some buyers, particularly in time-sensitive situations such as auctions. Especially if you’re heading to auction or making time-sensitive offers.
How to Get Pre-Approved for a Home Loan
Getting pre-approved is easier than most people expect. Typically, you’ll need to provide:
- Recent payslips and bank statements
- Proof of savings and deposit
- Credit history details
- Info on current debts or liabilities
A mortgage broker can help guide you through this and compare lenders and help identify options that align with your borrowing needs and circumstances.
Know Before You Go
Some lenders only offer online pre-approvals (quick, but limited), while others provide full assessments. A more detailed assessment upfront can help reduce uncertainty, although final approval still depends on full lender checks.
So before you start booking open homes, get clear on what you can afford, not just what you hope you can borrow.
Ready to Feel More in Control?
Pre-approval can influence how you approach your property search and may help you feel more informed and prepared.
Download our free First Home Buyer e-book to get a step-by-step checklist for securing pre-approval, decoding loan jargon, and avoiding common finance pitfalls. It’s packed with calculators, grant insights, and expert guidance; written with first-home buyers in mind.
Download the First Home Buyer e-book now and take your next step with confidence.
