What Is Home Loan Pre-Approval?
A home loan pre-approval is an indication from a lender that, based on the information and documentation they've assessed, you may be eligible to borrow up to a particular amount.
It can help you establish a realistic property price range before you start seriously looking.
Pre-approval is different from final loan approval. Once you find a property, the lender will generally need to assess the specific property and complete the final approval process before the loan can proceed to settlement.
Pre-approval periods vary between lenders, and are commonly around 3 to 6 months.
How Much Can I Borrow?
One of the most common questions buyers ask is: “How much can I borrow for a home in Perth?” There isn't one answer that applies to everyone.
Lenders may consider factors including:
A mortgage broker can help you understand how these factors may affect your borrowing capacity and identify lending options that may be suitable for your circumstances.
-
Your income
-
Employment type
-
Living expenses
-
Existing home loans
-
Personal loans
-
Credit card limits
-
Buy now, pay later commitments
-
Number of dependants
-
Deposit and available savings
-
Credit history
-
Property purchase plans
-
Other financial commitments
-
The lender's servicing and credit policies
Pre-Approval for First Home Buyers
If you're buying your first home in Perth, working out where to start can be overwhelming.
Before you spend weekends inspecting properties, it can be useful to understand:
Getting your finance position assessed early can help you approach your first home purchase with greater clarity. If you're eligible for applicable government schemes or concessions, these may also need to be considered as part of your overall purchase strategy.
-
How much can I borrow?
-
How much deposit do I need?
-
What property price can I realistically afford?
-
What other costs do I need to budget for?
-
Which lenders may be suitable for me?
Pre-Approval for Property Investors
If you're planning to purchase an investment property, your existing property portfolio and financial commitments can play an important role in determining your borrowing capacity.
Before you start searching for your next investment property, we can help you understand your lending position and explore suitable finance options. We'll consider your existing loans, income, commitments and broader investment objectives when assessing your options.
Pre-Approval for Self-Employed & Business Owners
Self-employed borrowers and business owners can sometimes have more complex income structures than PAYG employees.
Depending on your circumstances, lenders may need to assess information such as business financials, tax returns, company or trust income and other financial documentation.
At Brighton Finance, we understand the realities of running a business and can help you navigate the additional requirements that may apply to your pre-approval application. Our goal is to identify lenders whose policies may be suitable for your circumstances rather than taking a one-size-fits-all approach.
How Long Does Home Loan Pre-Approval Last?
The validity period of a pre-approval depends on the lender. Many lenders provide pre-approval for around 3 to 6 months, although the exact period can vary.
Your financial circumstances can also change during this period. If your income, employment, debts or other circumstances change, it's important to let your broker or lender know.
If your pre-approval expires before you find a property, you may need to have your financial position reassessed or apply for an extension, depending on the lender.
Is Pre-Approval the Same as Final Approval?
Pre-approval is an indication that a lender may be willing to lend you up to a particular amount based on the information assessed at that stage. It does not mean the lender has approved the specific property you eventually purchase.
Once you find a property, the lender may need to:
The loan will only proceed to settlement once the lender's final approval requirements have been satisfied.
-
Assess the property
-
Review the contract
-
Complete a valuation
-
Confirm the loan amount
-
Verify that your circumstances have not materially changed
-
Complete any remaining credit and lending requirements
Should I Get Pre-Approval Before Looking for a Property?
Getting your finances assessed before you begin seriously searching for a property can help you establish a realistic budget. It can also help you avoid spending time looking at properties outside your likely borrowing range.
Once you have an indication of what you may be able to borrow, you can focus your search on properties that are more realistically aligned with your financial position. Your broker can also help you understand the other costs associated with purchasing a property—not just the purchase price.
Why Choose Brighton Finance for Your Pre-Approval?
At Brighton Finance, we don't believe pre-approval should simply be about finding out the biggest number a lender may offer. It's about understanding what you can comfortably and realistically afford while considering your broader financial goals.
-
Personalised Advice — We take the time to understand your circumstances, goals and future plans before recommending suitable options.
-
Access to Multiple Lenders — We have access to an extensive panel of Australian lenders, allowing us to compare suitable lending options rather than limiting you to one bank.
-
Clear Communication — We explain the process, lender requirements and your options in straightforward language.
-
Support From Application to Settlement — Our relationship doesn't end when pre-approval is issued. When you find your property, we'll help guide you through the next stage of the lending process.
-
Real-World Experience — Founder and Principal Mortgage Broker Chintan Shah has personally experienced the journey from arriving in Australia to purchasing his first home, running businesses and building a career in mortgage broking. That experience shapes Brighton Finance's practical, client-first approach.
