What is Pre-approval and how long does it take?

When you're on the hunt for your new home, getting home loan Pre-approval (also known as conditional approval) has its benefits. This process can give you an idea of your borrowing power and make you a more attractive buyer. But what exactly is Pre-approval, how long does it take, and how long does it last? 

What is home loan Pre-approval?

Home loan Pre-approval is a full assessment of your personal details and finances (including a credit check) - before you’ve found a property to purchase. Pre-approval is conditional and subject to the property you are looking to purchase. It is not a guarantee of a loan but a helpful step in the process. 

Some lenders refer to Pre-approval as conditional approval or conditional Pre-approval. It is important to understand that Pre-approval with your lender is fully credit assessed. At Qantas Money Home Loans, Pre-approval includes a full assessment of your personal details and finances including a credit check^π. This check provides you with confidence to understand your borrowing capacity while you search for your new home. 

What you need to know about Pre-approval

• Getting Pre-approval involves applying to a lender who will assess your financial situation and whether you can repay the home loan. 

• The lender will check your personal details, income, expenses, credit history, and financial history.

• If pre-approved by the lender, the Pre-approval provides a pre-approved borrowing amount that typically expires after 120 days. A Qantas Money Home Loan Pre-approval will expire in 60 days, and you’ll have the option to renew it for another 60 days, as long as none of your personal or financial information has changed.

• Pre-approval is obtained before you've found a property to purchase. 

• Once you've found a property, the lender will assess it - by way of a property valuation - so you can progress to full approval.

Is Pre-approval a good thing?

Yes – think of it as an approval, in principle. Pre-approval is not a compulsory part of applying for a home loan, but it can let you know how much you can borrow and what your borrowing limit is based on the information available and assessed at the time of you applying. This allows you to set realistic expectations, enquire with more confidence, and show that you are a serious buyer. Once you find a property, it can also speed up the final loan approval process. 

How long does Pre-approval take?

The timeframe for receiving home loan Pre-approval can vary depending on the lender and your circumstances. It can take anywhere from a few minutes to a few weeks, depending on the complexity of your financial situation and the lender's processing times. The Qantas Money Home Loans Pre-approval online application process is designed to make the Pre-approval turnaround time more efficient.

At Qantas Money Home Loans, our home loan experts may need to review and verify certain aspects of your application before  you get pre-approved. However, seeing as our application process is online, you may be pre-approved instantly.

How Long Does Pre-Approval Last?

Home loan Pre-approval doesn't last forever – it has an expiry date.

With Qantas Money Home Loans, your Pre-approval will be valid for 60 days. There is a reminder before it expires, and you can contact your home loan expert and renew it for an additional 60 days. The maximum time you can have Pre-approval before it expires is 120 days. Once this expires, you'll need to start a new application.

Remember: Pre-approval is conditional. Significant changes in your financial situation during this period – like a new job, decreased income, major purchases, or new substantial debt – could impact your Pre-approval status. Other factors which can impact your Pre-approval include interest rate increases and changes in credit policy.

Tip: If your Pre-approval is approaching its expiry date and you're still looking for a house, contact your lender to see if you can request a renewal.

How do you get pre-approved for a home loan?

While the Pre-approval process might differ slightly from lender to lender, it typically involves several steps.

1. Review the market: Choose a lender or mortgage broker. 

2. Check your finances: Before applying, check your deposit, savings, debts, expenses, assets, and credit score and ensure you're in the best position possible. Good financial health improves your chances of getting pre-approved.

3. Gather documents: These can include proof of income (pay slips, tax returns), identification, and details of your assets and liabilities.

4. Apply for home loan Pre-approval: Fill out the Pre-approval application and supply documents.

5. Assessment: The lender will review your application and perform a credit check. If approved, you'll receive a Pre-approval letter with your potential loan amount and any conditions.

At Qantas Money Home Loans, the application for Pre-approval is very similar to a standard application for full approval. The only difference is that you don't need to submit the property details (address). Instead, we will ask for your preferred postcode. If you're considering multiple suburbs, choose your preferred. This can be updated later if you choose a different location.

We will also ask how much you'd like to borrow, so using our borrowing calculator can help guide you when applying. If you are still unsure, use the calculator to provide an estimate in your application, you can always ask the home loans specialist to help you understand your borrowing capacity.

What does subject to finance mean?

When a property purchase contract is subject to finance, it means the sale is conditional upon the buyer obtaining final approval for a home loan. Put simply – the "subject to finance" clause gives you time to organise a loan for the property you're interested in. Please note however that auction sales have no cooling off period and are ‘unconditional’, committing you to settling on the purchase, even if you haven’t arranged finance

Discover Qantas Money Home Loans

• Easy Pre-approval process: Apply online to get an answer in minutes.

• 100,000 Qantas Points every year^: You can enjoy the benefits every year for the life of your home loan.

• Competitive rates: Get great rates and a holiday every year^ 

Help when you need it: Our home loan experts are here to help with your application, seven days a week.

^ Qantas Frequent Flyer members will earn 100,000 Qantas Points upon settlement of their Qantas Money Home Loan. Members will earn the annual bonus of 100,000 Qantas Points three months after the settlement anniversary of their Qantas Money Home Loan for up to 30 years. Both upfront and ongoing points will be credited to the member’s Qantas Frequent Flyer account within 8 weeks of the Qantas Points being earned, provided the loan is in compliance with the Qantas Money Home Loans Points Eligibility Policy, not in arrears or default and the loan is not the subject of hardship relief or assistance. In the instance of joint applicants, the Qantas Points by default will be awarded to the primary applicant annually unless you opt to either split the points between the secondary or primary applicant or award the points in full to the secondary applicant.

^π Pre-approved loan amount is based on the information available at time of assessing in addition to product interest rate and bank credit policy at time of application. If your circumstances change during the application process, or our interest rates increase or the property value is less than anticipated or is an unacceptable security to the bank, we may offer a reduced loan amount or may not be in a position to continue with this loan. Before we can finalise a full approval, we'll also need the signed Contract of Sale to complete some final checks and obtain a formal valuation to confirm the property value. Your Pre-approval is valid for 60 days. We’ll only be able to renew it once for an additional 60 days and updated financial information may be required for a Pre-approval extension. If your Pre-approval has expired, you’ll need to start a new application. There are risks associated with relying on a Pre-approval when bidding at auction and/or entering into a contract of sale particularly when it is not a cash unconditional contract. We recommend you seek legal advice and financial advice before entering into any legally binding contracts or agreements.