Ready to buy a property? You’ll need to show the seller you have enough money. For most
people, this will mean getting a loan, and the first step to getting one is obtaining pre-approval for it.
Pre-approval – also known as conditional approval or approval in principle – is an indication from a
lender as to how much you can borrow. If you have pre-approval, vendors and agents know you’re
serious about buying. Here are the steps you need to follow.
1.Gather your financial information
To get an idea of how much you can borrow, and therefore what you can afford to buy, you need to
give the lender a comprehensive picture of your finances. This includes your income and assets,
and your financial obligations such as existing debts and living expenses (including ongoing bills,
entertainment, food and car expenses, etc).
You'll need evidence of everything:
You can use all of this information to get an idea of how much you may be able to borrow. There
are a number of free mortgage tools and calculators that can help.
2.Meet a lender or broker
Make an appointment to speak to a lender or mortgage broker. Most will provide a list of what you
need to bring with you, such as the evidence explained above and the required forms of ID.
At the appointment, the lender or broker will use your information to calculate an approximate
borrowing figure. If you want to proceed, you can fill in a pre-approval application form.
3.Undergo a credit check
The lender will arrange for an independent credit bureau to perform a credit check on you. This may affect whether or not you can borrow money, and how much.
4.Receive conditional approval
Assuming your credit rating allows you to borrow, you'll then receive a conditional approval
certificate from the lender. The certificate is usually valid for 90 days. This is an indication, not a
guarantee, of the amount you can borrow.
Use this figure to work out how much you can spend on a property, taking into account the size of
your deposit. Factor in expenses such as conveyancing fees, stamp duty and so on. Also consider
that you may not be able to borrow as much as the conditional approval certificate indicates.
Securing pre-approval will allow you to househunt with confidence.
What happens next
Once you’ve put in an offer on a house – whether at auction or a private sale – you’ll need to get
full approval on a loan. Contact your lender or mortgage broker with details of the property, and
they’ll work through the home loan application process with you.
Obtaining pre-approval for your loan is an important part of the home-buying process. Contact your
mortgage broker today for help with finding out how much you can borrow.
Phone: 0426 241 741 | 03 9372 7964
Head Office: Suite 2, Level 1, 77 Raleigh Street Essendon VIC 3040
Brookline Finance Pty Ltd ATF The BF Business Trust is a credit representative (473836) of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237)
John Traficante trading as Brookline Financial Services Pty Ltd are Authorised Representatives of Total Financial Solutions ABN 94 003 771 579, an Australian Financial Services Licensee, Registered office at Level 11, 309 George St, Sydney NSW 2000 and a member of the National Australia group of companies