Pre-Approvals
Two different things are called pre-approval, and only one is worth bidding on. Here is how to tell them apart and what an assessed approval actually commits a lender to.
Not All Pre-Approvals Are the Same Thing
One kind is an instant online estimate generated from figures you typed in. Nobody has looked at your documents or your credit file. It is a calculator result with an approval-shaped name.
The other is an assessed pre-approval, where a lender's credit team has reviewed your documents and your credit position and formed a view. At auction, that distinction is the whole difference — there is no cooling-off period and no finance clause, and the contract binds on the fall of the hammer.
- Whether a real assessor has reviewed your file, or only a calculator
- What conditions remain outstanding on the approval
- How long it lasts before it needs refreshing
- What the lender still needs to see, particularly the property valuation
- What would put the approval at risk between now and settlement
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Conditional, Expiring, and Property-Dependent
An assessed pre-approval is a strong position. It is not a guarantee, and treating it as one is where people get caught.
- It is conditional. Conditions remain — commonly a satisfactory valuation and final document verification.
- It expires, usually after a few months. If your search runs long it needs refreshing, and your circumstances get re-checked.
- The property is assessed too. The lender values what you are buying. A valuation below the contract price is your shortfall to cover.
- It is lender-specific. An approval from one lender says nothing about what another would do.
- Unusual properties can fail on their own merits — small apartments, company title, or particular building types, regardless of how strong your finances are.
We tell you which conditions are outstanding and what would satisfy them, so you know exactly how firm your position is before you bid.
What Undoes an Approval
Between pre-approval and settlement, the lender can and does re-check. Most approvals that fall over do so for reasons that were avoidable with a phone call.
- Opening new credit. A car loan, a new card, or a buy-now-pay-later account can be enough on its own.
- Changing jobs, particularly onto probation or from salary to contract. Sometimes unavoidable — tell us before, not after.
- Missing a repayment on anything, including a phone bill that reaches default.
- Large unexplained movements in and out of your accounts.
- Spending the deposit, or part of it, on something else.
None of these are unusual life events. They are just worth flagging before they happen, because almost all of them are manageable with notice.
Why It Matters More Here
A private treaty purchase usually allows a cooling-off period and a finance clause. If finance falls through, you have an exit, though it may cost you a small percentage.
An auction has neither. Bid successfully and you are contractually bound and paying a deposit that day. If finance does not come through afterwards, the consequences are serious and entirely yours.
- Have the pre-approval assessed, not estimated, before you register to bid
- Have the specific property considered where you can, not just your capacity
- Know your genuine ceiling, which is rarely the maximum you could borrow
- Have the contract reviewed by your solicitor before auction day
Sydney auction campaigns move quickly. The finance work is what lets you act on the right property rather than watch it go while you organise.
The Process, Step by Step
- Capacity assessmentWhat you can genuinely borrow, and what that means at your target price.
- Lender selectionWhich lender suits your income type, deposit and the kind of property you are looking at.
- ApplicationA properly prepared submission to one lender, rather than several speculative ones marking your credit file.
- Assessed approvalThe lender's credit team reviews and issues a conditional approval, with the conditions explained to you.
- Search, offer and formal approvalYou buy with confidence; we convert the pre-approval to a full approval on the specific property.
What to have ready
- Recent payslips, or two years of returns and financials if self-employed
- Three to six months of bank and savings statements
- Statements for credit cards, personal loans and any other debts
- Photo identification
- Evidence of the deposit and its source
Not all of it is needed on day one. We will tell you what matters first so you are not gathering paperwork you do not need yet.
Common Questions
How long does pre-approval take?
It depends on the lender's assessment queue and how complete the application is when lodged. A well-prepared salaried application generally moves faster than a complex self-employed one. We give you a realistic estimate at the outset rather than an optimistic one.
How long does a pre-approval last?
Typically a few months, varying by lender. If your search runs beyond that it can usually be refreshed, though your circumstances are re-checked at that point — so anything that has changed in the meantime becomes relevant again.
Does applying for pre-approval affect my credit score?
An assessed pre-approval generally involves a credit enquiry, which is normal. What causes damage is multiple applications across different lenders in a short period. That is a good reason to establish which lender suits before applying rather than testing several.
Can I bid at auction with pre-approval?
You can, and with an assessed pre-approval you are in a reasonable position to. Understand that it remains conditional — the property still has to value up, and an auction contract has no finance clause. We will tell you plainly what remains outstanding before you register.
What is the difference between pre-approval and conditional approval?
The terms are used loosely across the industry. What matters is whether a lender's credit team has actually assessed your documents, or whether a system has returned an estimate. We will always tell you which one you are holding.
Can a pre-approval be withdrawn?
Yes. It is conditional, and lenders re-check before final approval. New credit, a job change, a missed repayment or a shortfall in the valuation can all affect it. Most of these are manageable if you tell us before they happen.
Guides on This Topic
- How much can I borrow? What lenders assess
- The first home buyer's guide to getting finance right
- What you need to buy in Mosman, Manly or Chatswood
These go deeper than a service page reasonably can. All general information only — and none of it takes your particular circumstances into account.
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General information only. It does not take your objectives, financial situation or needs into account, and it is not credit or financial advice. Lender policy and eligibility change regularly and vary between lenders — talk to us about your own circumstances before acting on anything here. Sabea Financial, Credit Representative 539 662, ABN 86 653 823 253, is authorised under Australian Credit Licence 391237.