Home loan pre-approval explained

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A guide to home loan pre-approval

Updated March 21, 2024
Written by James Hurwood
Reviewed by Stephen Zeller

How does home loan pre-approval work?

Let the host of Selling Houses Australia, Andrew Winter, walk you through what you need to know about home loan pre-approval.
Andrew Winter
Home Loans

Expert tips for understanding home loan pre-approval

Home loan pre-approval can be an invaluable thing to have in your back pocket when navigating your home-buying journey, but it’s crucial you understand the ins and outs of how it works first. Our General Manager of Money, Stephen Zeller, has some pre-approval tips for the prospective homebuyers out there to help them work towards final home loan approval:

Stephen Zeller
General Manager – Money

Check your credit score beforehand

Check your credit score before applying, as lenders will factor this in when assessing your application, and it will form a significant part of your overall creditworthiness. You can obtain a free credit report with Compare the Market, which will not only show you your credit score but give you an overview of your repayment history, including any late payments or defaults which you may or may not be aware of.

Have your documentation ready

When applying for a home loan pre-approval, you should have certain documents ready to provide to the lender to help them conduct a proper assessment of your finances. Documents such as payslips, bank statements and identification will help speed up the process.

We’re here to help

Finding the right loan product can be confusing – however, obtaining a home loan pre-approval becomes easy with the help of our free online application and your very own Home Loan Specialist. They will help you find the right loan for your specific needs saving you time and the hassle of doing it alone.

What you need to know about home loan pre-approvals

What is a home loan pre-approval?

Why should I apply for a home loan pre-approval?

The two types of home loan pre-approval process

Generally speaking, there are two kinds of home loan pre-approval: system-generated pre-approvals and fully assessed pre-approvals. The difference between the two is significant, and not understanding it could potentially cause you grief down the line.

System-generated pre-approvals

Full-assessment pre-approvals

Applying for home loan pre-approval

How do I apply for a home loan pre-approval?

What factors influence my chances of being pre-approved for a home loan?

How long is a home loan pre-approval valid for?

Can a lender reject my home loan application even if I have home loan pre-approval?

What are the downsides of home loan pre-approval?

Meet our home loans expert, Stephen Zeller

Stephen Zeller
General Manager – Money

Stephen has more than 30 years of experience in the financial services industry and holds a Certificate IV in Finance and Mortgage Broking. He’s also a member of both the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the Mortgage and Finance Association of Australia (MFAA).

Stephen leads our team of Home Loan Specialists, and reviews and contributes to Compare the Market’s banking-relating content to ensure it’s as helpful and empowering as possible for our readers.