24 Oct 2017

Can Getting a Home Loan Pre-Approval Boost Your Buying Power?

When you’re house hunting, it can get pretty competitive. With multiple potential buyers vying for the same property, walking in with a home loan pre-approval in place could make all the difference between you getting the property of your dreams and missing out.

What is a home loan pre-approval?

Pre-approval, conditional approval, and approval-in-principle are all terms that, essentially, describe the same thing. It can be a little bit confusing since all three terms will mean slightly different things to different lenders. 

In essence, these three terms are used to describe a bank or lender agreeing in principle to provide you with a home loan at an early stage in your home-buying process.

Neither are a guarantee that the home loan will be funded: conditional approvals are given when an applicant is yet to find the property they want to purchase, and pre-approvals are given to those who have had their chosen property valued. Both require further assessments before being formally approved. 

Before you get a final approval, your application will be fully assessed once you have submitted all the required documents to support your application like proof of income, savings and other debts you may have.

Conditional approvals and pre-approvals normally last for up to 90 days and have various conditions attached, so it’s best to check with your lender.

You have a clear idea of your borrowing power

When you go through the conditional approval process, the lender will help you to figure out how much you can realistically afford to borrow. Knowing this early in the process could help you narrow down your house search.

You can confidently make an offer

Because you’ve already done your prep work with conditional approval, you can act quickly and make an offer when you find the property you like. Any offer would need to be subject to finance final approval.

Most of the paperwork is completed upfront

The good news is that most of the supporting documentation required in the pre-approval application is the same for the full application. Because you’ve done all the paperwork upfront it saves you time.


When you apply for a home loan conditional or pre-approval you’re under no obligation to actually take out the loan. Pre-approvals are valid for 90 days and can easily be renewed. It’s important to be aware that a credit check will be conducted for conditional and pre-approvals, and multiple credit checks can do damage to your credit score. 

Getting a conditional approval prevents you from going overboard and house-hunting way outside of your budget. But in addition to that, conditional approval shows agents, vendors and lenders that you’re a serious prospect.

Mortgage House

At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.

But don’t worry, we can help with that.

If you’re thinking of buying a home, you can contact us for advice about the best options for you when it comes to your mortgage. 

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