Buying a home can be daunting. You’re likely to have questions like - How much can I borrow? What will my repayments be? What’s a LVR? How much deposit do I need?... the list goes on. You’re bound to have questions and many things to consider.
Home loan pre-approval provides some initial comfort that you will be able to apply for a loan with us. We’re here to make it simple and easy for you to understand so you can purchase with confidence.
A good bank knows there is so much to consider when buying a house and you want the finance to be the least of your worries.
What is home loan pre-approval?
Pre-approval, also known as approval in principle (AIP) or conditional approval is where Australian Unity Bank conditionally approves a home loan before you buy a property subject to then satisfying specific conditions when actually applying for your home loan with us.
Getting a pre-approval is not compulsory, but it’s useful if you want to know approximately how much can I borrow, to work out what you are comfortable repaying, and to determine where you can afford to purchase a property.
How does the conditional approval process work?
To do a pre-approval you need to provide your bank with information about your financial position. The bank will let you know, based on this information, how much you could borrow. The pre-approval is a conditional approval (not a guarantee) because the bank has not done a full home loan assessment, where you have provided evidence of your financial information, such as your payslips, PAYG statement, living expenses, etc., and a credit check has not been done.
How to apply for pre-approval of your home loan?
When we say conditionally approve, we mean your home loan isn’t guaranteed – as pre-approval isn’t a full or final home loan assessment. Pre-approval confirms that your application fits Australian Unity Bank’s lending criteria but remains subject to conditions such as proof of purchase of a property, acceptable valuation of the property you plan to buy, and providing evidence about your financial information).
Our lending specialists will help you step by step. We’ll discuss the finer points of what to expect with your pre-approval, and what’s involved, and then outline what happens when you’ve found the right house. We’ll give you an insight into what to expect if you move to a full application.
That’s why you can house hunt with confidence knowing that your finance is conditionally pre-approved with Australian Unity. It means that when you find the right house you’ll be ready to buy.
How long does a pre-approval take?
Presuming no material changes in your financial circumstances or market forces outside your control, a home loan pre-approval is valid for around three months. This may differ from lender to lender.
Home loan pre-approval is very useful as it helps you understand what and where you can afford to buy, what you’re comfortable repaying, whilst making negotiating easier (sellers will see you as a serious buyer). In addition, applying for a home loan pre-approval is fast and doesn’t impact your credit score – so there’s no harm done.
