Buying preparation
Pre-approval helps you search with a clearer budget, but it is not the same as final approval.
Pre-approval is an initial lender assessment of your ability to borrow. It is usually based on the financial documents you provide and is subject to conditions, including a satisfactory property valuation. It can make your price range clearer and show vendors that you have started the finance process.
Most applicants need identification, recent income evidence, bank statements, details of living expenses and statements for liabilities. Self-employed applicants may need business financials and tax returns. Supplying complete, current documents helps avoid delays and gives a more useful assessment.
A lender still needs to assess the property and verify that your circumstances remain suitable. A new credit card, car loan, job change or missed repayment may affect the outcome. The lender can also reduce its valuation below your purchase price, which may change your deposit requirement.
Ask when the pre-approval expires and whether it needs refreshing while you search. Keep your finances stable, avoid unnecessary credit applications and have a conveyancer review the contract. At auction, understand your finance position before bidding because the purchase is commonly unconditional.