Applying For Your First Home Loan? What You MUST Know About The Pre-approval Process!

First Home Buyers Guide To Obtaining a Pre-Approval Home Loan

When you apply for a home loan, the lack of a pre-approval may make you miss out on securing a home. While you will be out there, securing your mortgage with your lender, someone else – with a pre-approved home loan – can basically snatch your dream house from you.

Even if you put down a deposit for your home, you can still waste a lot of time when applying for a mortgage. Moreover, if that mortgage is declined, not only that you will lose your future home, but you may also say goodbye to your deposit.

This is why it is important that you know how pre-approvals work. As most people say, the world is moving fast, and you may have to move faster if you want to keep up. Therefore, today we’ll be talking about the process behind home loan pre-approvals.

What Is a Pre-Approval?

A home loan pre-approval is basically an initial assessment done by a lender and it shows you how much money you can borrow based on your financial position. A pre-approval is acquired by submitting a brief application in which you provide financial information that your lender will verify.

You may also come across what is known as approval-in-principle and conditional approval – these are two of the other ways that lenders may call pre-approval.


With a pre-approval, it means that your loan has been pre-assessed by a lender/bank. It is valid for three to six months and it allows you to know the maximum purchase price for a certain property.

Moreover, getting a pre-approval also means that you know – for sure – that your personal situation meets the required lending criteria and you can shop around for your new purchase with not only confidence, but negotiating power as you know exactly how much you can spend.


These are not necessarily disadvantages – after all, a pre-approval is more than recommended – but things that you should know after you get your home loan pre-approval.

First of all, even though you have been given a pre-approval, the bank/lender still hasn’t confirmed that they will accept your property as loan security.

Naturally, there may also be particular conditions that you have to meet for you to get your pre-approval. Moreover, it is known that you cannot rely upon all types of pre-approvals.

In short, a home loan pre-approval gives you an idea of how much money you can borrow. This is the first step to gain the trust of a potential seller – a pre-approval means that you are serious about buying their property.

It is also important to note that while your pre-approval is valid for 3-6 months, the lenders credit policy may change within this time frame thus, when you go to convert your application to formal approval, you may run into some unexpected issues. It is always a good idea to confirm with your mortgage broker the validity of your pre-approval and borrowing position, your broker should be up-to-date with lender policy and changes.

When Should You Apply for a Pre-Approval?

You should consider applying for a home loan pre-approval as soon as you are ready to purchase a property. At this point, you will have an idea of your price range, borrowing power, as well as of the areas where you wish to buy.

Basically, as soon as you start looking at properties and have the intention to purchase, you should apply for a pre-approval.

The Process Behind Home Loan Pre-Approvals

Pay attention to what you have to do in order to apply for and get a home loan pre-approval. This step can determine whether you’ll own the house of your dreams or not.

Finance Review

Before applying for a pre-approval, it is recommended that you look into your own finances. You will want to consider your usual expenses, your income, how much you currently owe in debt, as well as the assets that you own.

If you do this, you will have an idea of how much you can borrow before being assessed by a lender. Moreover, it is highly recommended that you also consider how much you can afford when it comes to monthly payments – as this is yet another aspect that may affect your borrowing power. Our brokers will also be more than happy to assist evaluating your borrowing position.

Type of Home Loan

After analysing your finances, it is time to decide over the type of home loan that you wish to apply for – investment vs owner occupied, fixed vs. variable. In the end, you should know which type of loan is fit for your needs however having a chat with our mortgage and finance brokers is always a good idea.

Applying for a Pre-Approval

Then, you will have to apply to your bank for pre-approval. Contact our office who will commence this process for you and match you with the right lender with access to over 60 different banks.

You will have to meet with your lender and assess the following things:

Credit Report – also known as your credit history. This is a record of your credit cards, loans, and any other credit products that you were subject to over the past couple of years. This record will include bankruptcies and defaults as well and will determine your overall credit rating – the latter shows your ability to pay back your debt in time.

Financial Situation – the lender will assess, once again, your current financial situation, and determine how much you currently own, as well as how much you owe.

Type of Loan – they will also review the type of loan that you wish to apply for. Together, you will determine if it is reasonable and favourable for you, taking into account your credit rating and financial situation.

The Bottom Line

At this point in our article, it goes without saying that applying for a home loan pre-approval is essential for your dream of owning a property.

You may not find the property that you want, or things may change in the very last minute. However, always keep in mind that a pre-approval can save you a lot of time and ultimately even secure you the house of your dreams.

Given that the process is rather simple, and you don’t need to go too much out of your way to apply for a home loan pre-approval, it is more than recommended for you to do so.

In case you still have any other questions or simply need more information regarding your loan or any other matters, feel free to contact us.

Our team of experts will guide you through the process of finding the best possible lender for you! Let us help you find the house of your dreams – reach out and contact us today! Contact us on 02 8530 1107 or submit your scenario online.


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Whether you’re a first home buyer looking at entering the market or an existing home owner looking at ways to save money on your home loan, we have you covered. We’ve put hundreds of hours of research into these guides to ensure you end up ahead, and it’s completely on the house.

So, why use Highline Lending for your home loan?

We meet for a consultation, obtain your supporting documents and proceed to structure and package your application for approval knowing exactly what the banks want to see. We also monitor your home loan post approval ensuring you’re home loan suits you and your financial position

We get paid a commission from our lenders as a result of introducing your business to them. Subsequently, our service is at no cost to you. Our commission does not affect your interest rate whatsoever, if anything, we’re in a position to get you a lower interest rate than the general public due to our relationships with our banks

With our many years experience in the industry, we’ve been exposed to both easy and complex loan scenarios. Each loan we process gets presented to over sixty financial institutions, ensuring we have explored all options possible and are able to provide a solution