What pre-approval is, and what it isn't
The lender checks your income, expenses, debts and credit file, then confirms how much it would lend. It's conditional: you still need formal approval once you've found a property, which includes a valuation and a final check of your finances.
How long it takes
Usually a few days to a couple of weeks, depending on the lender's turnaround times and how quickly your documents come together. Having your documents ready makes a real difference. My document checklist lists what lenders ask for.
How long it lasts
Most pre-approvals last three to six months. If yours runs out before you buy, it can usually be renewed with updated documents.
What can cause a problem before formal approval
- Changing jobs, or a drop in income
- Taking on new debt, including car loans, credit cards or buy now, pay later
- The valuation coming in below the price you've agreed to pay, which is more likely in flood-prone areas
- The property being unacceptable to the lender, such as a very small unit
- Changes in lender policy or rates while you search
Pre-approval and auctions
At auction there's no cooling-off period and no finance clause, so pre-approval alone isn't enough. Before bidding, I can ask the lender to look at the specific property, and you should have your deposit ready.
Questions people ask
How long does home loan pre-approval take?
Usually a few days to two weeks, depending on the lender and how quickly your documents are ready.
Does pre-approval affect my credit score?
A credit enquiry is recorded. One pre-approval with the right lender is better than applying at several.
How long does pre-approval last?
Usually three to six months, depending on the lender.
Is pre-approval a guarantee?
No. Formal approval still depends on the property, the valuation and your finances at the time.
