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  • Writer's pictureColin Green

Home Loans: How Long Does Pre-Approval Take?

One of the topics we regularly get asked about is home loan pre-approval. Securing pre-approval on your loan can make life a whole lot easier when you find the perfect property. It means that you can have more confidence about how much you’re able to borrow and it can potentially speed up the home buying process too. But what exactly is a pre-approved home loan and how long does pre-approval take? Let’s take a closer look at the process and what you need to know if you’re ready to find a new home.

house keyring on top of a mortgage application with approved stamped on it

What Is a Pre-Approved Home Loan?

A pre-approved home loan is a conditional approval from a lender, indicating that they are willing to lend you a specified amount of money, subject to certain conditions. Sometimes it’s also called an approval in principle and it's essentially an assurance that you qualify for a loan based on your current financial situation. This conditional approval provides a clear idea of your borrowing capacity, allowing you to focus your property search within a specific price range. It’s an optional but recommended stage before submitting your mortgage application.

How Long Does Pre-Approval Take?

In Australia, the pre-approval process typically takes a few days. However, this timeline can vary depending on the lender, your circumstances. It’s important to remember that every loan application is unique so obviously some pre-approvals may take longer than others. Some of the factors that may also influence how long pre-approval takes include:

  • Lender Workload: During peak times, particularly if you’ve chosen a competitive lender, they may be working through higher volumes of applications, which can extend processing times.

  • Completeness of Documentation: Providing all necessary documents accurately and promptly can significantly speed up the process. Missing or incomplete information can lead to delays.

  • Complex Financial Situations: If you have a complicated financial situation, such as multiple income sources or significant existing debts, the lender may require more time to assess your application.

Why Might It Take Longer To Get Pre-Approved?

There are a few reasons why the process might take longer but a longer wait doesn’t necessarily mean bad news, so don’t panic. Some examples of why a lender may need a little more time include:

  • High LVR: If your loan to value ratio (LVR) is more than 80%, triggering the need for Lenders Mortgage Insurance (LMI)

  • Self-Employment: Self-employed individuals often need to provide more extensive documentation, such as tax returns and business financials, which can lengthen the approval process.

  • Unusual Property Types: Purchasing a unique or non-standard property (e.g., rural properties, apartments in high-density buildings) can lead to extended evaluations and assessments.

  • High Loan Amount: Larger loan amounts typically require more comprehensive assessments and stricter scrutiny by the lender.

  • Complex Income Sources: If you have multiple income sources or non-standard income types (e.g., freelance, commission-based, or seasonal work), the lender may need additional documentation to verify your earnings.

  • Incomplete Application: Providing incorrect or incomplete information in your application can lead to delays as the lender seeks the necessary details.

  • Complex Borrowing Arrangements: If you are borrowing through a self managed super fund, a trust or a company or you need the support of a guarantor, it may take a little longer for pre-approval.

How Do You Get Pre-Approved For A Home Loan

At the point when you’re looking for pre-approval, you’ll have likely already done your homework to understand your borrowing capacity (using our handy calculators) and how much you can afford to repay. You might also have done some research on the local property market including the areas or suburbs that you’re interested in buying in and you might work with a home loan broker to understand the products available that suit your needs.

From that point the key steps to get pre-approved are:

  1. Preparation and Documentation: The first step involves gathering all the necessary documentation. As well as the usual identification documents, this typically includes: recent payslips, proof of savings or other sources of income, details of debts and expenses such as credit cards, HECS debts etc.

  2. Application Submission: Once you have all the required documents, you submit a pre-approval application to your chosen lender. Many lenders offer online applications, making this step pretty straightforward.

  3. Credit Assessment: The lender will conduct a thorough assessment of your financial situation. This includes checking your credit history, verifying your income and employment and evaluating your existing debts and liabilities.

  4. Conditional Approval: If your financial situation meets the lender's criteria, you will receive a conditional approval. This means that the lender is willing to lend you a certain amount, subject to further conditions such as property valuation and final verification of details.

What Are The Benefits Of Getting Pre-Approved For A Home Loan?

Getting pre-approved for a home loan is a great idea particularly if you have already done your homework and you’ve made a firm decision to buy. Some of the main benefits of getting a conditional approval are:

  • Budget Clarity: Knowing your borrowing capacity helps you set a realistic budget and focus your property search accordingly.

  • Stronger Negotiating Position: With a pre-approval, sellers perceive you as a serious buyer, potentially giving you an edge in negotiations.

  • Faster Settlement: Once you find a property, the loan approval process is quicker, as much of the groundwork has already been completed.

Tips to Speed Up the Pre-Approval Process

As in most scenarios, preparation is key! To help speed up the process you should:

  • Organise Your Documents: Ensure all required documents are readily available and up to date before you start your application.

  • Choose the Right Lender: Some lenders are known for quicker processing times. Doing your research can help you select a lender that meets your timeline needs.

  • Be Honest and Transparent: Provide accurate information to avoid any back-and-forth with the lender that could cause delays.

  • Stay in Communication: Respond promptly to any requests from your lender for additional information or clarification.

How Long Does a Pre-Approval Last?

Typically, a pre-approval lasts for 90 days, depending on the lender. If you haven't found a property within this timeframe, you may need to renew your pre-approval, which could involve re-submitting some documentation and a fresh assessment of your financial situation.

Obtaining a pre-approved home loan is a strategic step in the home-buying process which can offer clarity, confidence and a competitive edge. While the process usually takes a few business days, being prepared and proactive can help ensure a smooth and swift pre-approval experience. Keep your documents organised, choose the right lender and maintain open communication to expedite the process. With your pre-approval in hand, you'll be well on your way to finding your dream home.

Having an expert in your corner who can help you with every aspect of getting a home loan can make the process even smoother and less stressful. Contact us today or give Colin at CJG Finance a call on: 0402 413 917 or email him:

We're here to help you make informed decisions and achieve your home ownership goals.


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