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Choosing the right home loan

Applying for pre-approval

Bidding or making an offer on a property without having pre-approval on a loan is a bit like going to the airport without your boarding pass. Secure your preapproval and know what your limits could be and which conditions may apply to getting fully approved – that way you can be more confident your offer will be accepted when you’re ready to make it.

What is loan pre-approval?

A loan pre-approval means that a lender has agreed – in principle – to lend you an amount of money towards the purchase, subject to certain conditions being fulfilled. While a pre-approval is not a full or final approval,it allows you to know your maximum available funds so you can narrow your search, negotiate with more certainty and bid with more confidence if you're going to buy at auction.

A pre-approval is a valuable step in getting you closer to your new family home or investment property. It's not a requirement in the home buying process, but it can make life easier.

What are the benefits of pre-approval?

If you're looking to purchase a house, but you're not sure how much you can spend, it's difficult to know where to begin. You might find a property that seems perfect but have no idea whether it's a realistic option for your budget.

If a lender pre-approves you for a loan, they will do so for a specific amount. This means you can focus your house hunting on the properties you can afford. While we recommend havng a full approval before bidding at an auction, having a pre-approval can also mean that you can have a maximum bid in mind before you raise your hand.

Are there drawbacks to a pre-approval?

There aren't many drawbacks to obtaining a single pre-approval but having several in a short period can potentially harm your ability to borrow. Pre-approvals will be visible on your credit file as a loan enquiry. Many enquiries in quick succession with multiple lenders might create the impression that you're financially unstable.

This shouldn't discourage you from seeking pre-approval. However, it's a good idea to wait until you're seriously considering a purchase before seeking it, rather than applying early in the process when you might just be entertaining the idea.

Does pre-approval mean that my loan is guaranteed to be approved?

Does pre-approval mean that my loan is guaranteed to be approved? No. While pre-approval means that you're more likely to have a loan approved, it doesn't provide an iron-clad guarantee. The following factors – among others – can affect whether a loan for which you've been pre-approved proceeds to final approval:

  • failure to meet pre-approval conditions
  • changes to your personal circumstances
  • changes to government regulations
  • a negative valuation of the property
  • a change in the property's condition.

Ready to apply for pre-approval?

Learn how much you can borrow with Suncorp Bank’s Borrowing Limit Home Loan Calculator. It gives you a quick estimate of your borrowing power based on your income and expenses. Then, learn about organising your application and the approval process

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" My husband and I were looking to buy an investment property and we were so fortunate to have Nelvin help us every step of the way. He went above and beyond and was always there, willing to answer my endless list of questions and concerns. "

- Chris & Jess Falla

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Banking Products and Home Loans are issued by Suncorp-Metway Ltd ABN 66 010 831 722 AFSL No 229882 Australian Credit Licence 229882 (“Suncorp Bank”) to approved applicants only. Please read the relevant Product Information Document and the Terms and Conditions before making a decision regarding any Suncorp Bank products. Fees, charges, terms and conditions apply and are available on request or on our Product Information Documents and Forms page. 

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