Conditional approval is similar to full finance approval except that the property you intend to purchase has not yet been determined, and approved by the lender. But it gives you certainty and clear guidelines on how much money you have to work with. Some conditions usually need to be met before full finance approval will be granted.

It’s easy to get caught up in the excitement at auction - conditional approval lets you know the impact additional bids will have on your repayments.

Advantages of getting a conditional approval for your home loan:

• It’s valid for up to 3 months
• You can shop for your home with confidence
• Final unconditional finance approval is faster

Types of home loan conditional approval

There are a number of different types of home loan pre-approval, from a simple phone-based pre-approval through to written pre-approvals. Many of these are indications only of what the bank is willing to lend you. To be sure of your borrowing capacity you will need to secure a written pre-approval. You may need to pay some application fees, but the security is worth it, and you are then free to negotiate with confidence or bid at auction.

Secure a valuation

Despite its name, a formal pre-approval still has some conditions that need to be met before it progresses to a full approval. A valuation is the most common requirement, so it makes sense to secure a formal valuation through the lender you intend to borrow through prior to purchasing at auction or signing a contract.