Navigating the home buying process can be challenging and overwhelming, at times, but obtaining pre-approval from your lender can help you get started. As well as giving you an indication of your borrowing power, it can help give you the confidence to make an offer on a property.


Pre-approval (also known as ‘conditional pre-approval’ or 'in-principle approval') is an estimate from your lender of the amount you can borrow, provided you meet certain conditions. The conditions will vary depending on your circumstances. They could include paying off an existing debt or providing further documentation at a later date, such as an inspection report.


To obtain pre-approval, you will be required to submit evidence of your identity, such as your passport and driver’s licence, and your financial circumstances, such as recent payslips and bank statements. Once these documents have been reviewed and a credit check completed, your lender will advise the amount you can borrow. They will also confirm the defined period for which the pre-approval will last, which is usually six months (although the time frame can vary from lender to lender).


Depending on how long it takes you to find a property that you wish to buy, you may have to re-submit updated paperwork to your lender to confirm that your circumstances have not changed. If you have not found a property within the timeframe, you can reapply for pre-approval. There’s usually no charge for pre-approval, although the conditions of full or final approval of your loan are likely to include a property valuation, which will attract a third-party valuation fee.


What are the advantages of obtaining pre-approval?

The prospect of finding your new home is exciting and it’s easy to view properties that may, unfortunately, prove to be outside your price range. While obtaining pre-approval is not mandatory, it can help you:

  • focus your search on properties that are within your budget, so you are less likely to set your heart on a dream home that’s out of reach;
  • give you the confidence to bid within your budget at auction;
  • demonstrate that you are a serious buyer, which can help you negotiate with listing agents;
  • speed up the home loan application process when you are ready to apply for final approval of your home loan.


Other considerations to bear in mind

  • Each pre-approval application involves a credit check, so if you make multiple applications via different lenders your credit score could be adversely affected.
  • As pre-approval is conditional, there’s no guarantee that your home loan application will be given final approval. For example, if your financial situation changes or the valuation of the property does not meet the lender's LVR requirements, your home loan application may not be approved. A valuation provides assurance to the lender that the property is a suitable security for the home loan.


G&C Mutual Bank pre-approval

We understand that pre-approval can provide you with the confidence you need to find your new home. We will ask you to provide proof of your identity, expenses, employment, and income. We will also need an idea of the price range of the property you wish to buy and how much you have saved for a deposit. Once the required checks have been completed, our team will advise the amount you could be approved to borrow. Providing your circumstances do not change and subject to the conditions outlined, your pre-approval with G&C Mutual Bank will usually last six months. It’s a good idea to keep in touch with your lender so that once you find your new property, they can help progress your application for full approval of your loan.

Once you have found a property, a valuation will be undertaken by a qualified Independent Accredited Valuer as part of the final approval process. This is a third-party cost payable by the borrower.

If you are not yet ready to obtain pre-approval, you may find our First Home Borrowing Power Calculator and our Home loan glossary useful.


We’re ready to help you

At G&C Mutual Bank, we aim to make the home loan process as easy as possible for you. For example, if you’re planning to apply for the First Home Owner Grant, G&C Mutual Bank is an approved agent so we can assist with your application. We’re also a participant lender in the First Home Loan Deposit Scheme and our team is proud to be helping first home buyers realise their dreams of home ownership.

Make your move with an award-winning lender. G&C Mutual Bank was proudly named InfoChoice’s 2020 Home Loan Lender of the Year in the Customer Owned Category and we offer a range of competitive home loans.

Apply online, contact us or connect with a Mobile Lender.