pre-approval
Fast and Accurate approvals
Optimum Finance strives to get you fast and successful pre-approvals so you can start your house hunting early.
It is important to use a broker as we can ensure you are with the perfect lender match. Getting it rite the first time is crucial to avoid lowering your credit score unnecessarily.
What you should know
What exactly is pre-approval?
Think of a pre-approval (also known as conditional approval) as a “green light” from a lender. It is a formal indication that they are comfortable lending you a specific amount of money based on your current income, debts, and lifestyle.
While it is not a binding contract, having a pre-approval offers three major benefits:
Budget Clarity: It helps you refine your property search so you aren’t looking at homes out of your price range.
Negotiating Power: It shows real estate agents and vendors that you are a serious buyer.
Bidding Confidence: You can make offers or bid at auction knowing your finances are sorted.
How long is my pre-approval valid for?
Typically, a pre-approval is valid for 90 days (3 months), though this varies slightly between lenders. Your approval letter will clearly state the expiry date.
Is your pre-approval about to expire?
Don’t panic. If your expiration date is approaching and you haven’t found a property yet, simply get in touch with us. Since we already have your documentation on file, we can often fast-track a renewal or extension to keep you “buyer ready.”
Is a pre-approval a 100% guarantee?
No, a pre-approval is conditional. It is based on your circumstances at the time you applied. It is not an unconditional offer of finance.
The lender still needs to perform a final check before full approval (unconditional approval) is granted. This usually involves a property valuation to ensure the home you are buying meets the lender’s risk criteria.
Common property types that may trigger lending restrictions include:
Serviced apartments.
High-density inner-city units (especially if you have a deposit smaller than 20%).
Commercial or company title properties.
Small studios (generally under 50sqm).
Will rising interest rates affect my pre-approval?
They can. Lenders calculate your borrowing power based on an assessment rate (the current interest rate plus a buffer).
If interest rates rise significantly between the time you get pre-approved and the time you find a property, your maximum borrowing limit may decrease.
Small rate hikes: Usually accounted for in the lender’s buffer.
Significant rate hikes: May require a reassessment of your loan application.
Our Advice: Always call us for a quick check-in before making an offer to ensure your numbers still stack up in the current market.
I’ve found a property I love. What are the next steps?
Exciting news! But before you sign anything, follow these steps:
Call us immediately: We will check that the specific property meets the lender’s policy.
Get your Free Property Report: We can provide you with data on recent comparable sales in the area to ensure you aren’t overpaying.
Understand the sale method:
Auctions: These are generally unconditional. If the hammer falls, you are legally bound to buy. You must have your finances 100% ready before bidding.
Private Treaty: If you are making a written offer, we strongly recommend including a “Subject to Finance” clause (usually 10 to 14 days). This protects your deposit if the bank declines the loan.
My offer was accepted! Now what?
Congratulations! The hard part is over, and now we move toward settlement.
Here is your action plan:
Notify us: Send us the signed contract of sale immediately so we can progress your application from “Pre-Approval” to “Unconditional (Formal) Approval.”
Pay your deposit: You will need to pay the deposit as outlined in the contract (usually 10% for auctions, or a holding deposit followed by the balance for private sales).
Wait for the green light: We will work with the lender to finalize your loan documents.
Ready to start your property journey? Contact our team today to get your pre-approval sorted.