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Getting conditional approval for your home loan is an important step in the home buying journey. It allows you to look – and enquire – with confidence, and it helps narrow your options. Here are eight commonly asked questions about conditional approval.

Give me the main points

  • Conditional approval shows agents and vendors you’re the real deal.
  • It helps focus you on what you can afford.
  • Conditional approval is a concept of many names (eg. pre-approval).
  • It means (slightly) different things to different lenders.
  • You can put in a ‘subject to finance’ conditional offer at a private sale.
  • But at an auction, you’ll need to have your deposit up-front and finance sorted.

1. Do I need conditional approval?

Most people at an open home aren’t looking to buy that particular house. Not really. They’re doing their homework, getting a sense of the market. They’re dipping a toe in (or just being nosey!). But with loan conditional approval, you’re in a different camp. You’re the real deal. You’re showing real estate agents and vendors you’re serious and someone to negotiate with.

Conditional approval also keeps your feet on the ground. You know exactly how much you can afford—and don’t waste time drooling over houses outside your budget.

2. Pre-approval, conditional approval or approval-in-principle?

Different lenders use different terms—pre-approval, approval-in-principle and conditional approval—to describe much the same thing. It can be confusing. But think of it like this:

  • It’s an enquiry to establish your financial position.
  • It’s an indication (not a guarantee) from the bank as to how much you can borrow.

At NAB, we call this pre-approval stage 'conditional approval'.

3. When should you apply for conditional approval?

Homebuyers often apply for conditional approval once they’ve done some initial research:

  • You’ll have worked out your borrowing capacity using various financial tools and calculators
  • You’ll have worked out how much you can afford to repay
  • You’ll have studied different types of home loans, and you may have looked at the local property market and suburb you’re interested in.

Don’t apply too early—our conditional approval is valid for 90 days from application.

4. How do you apply?

It’s pretty straightforward. All you need to do is call 13 78 79 and a home loan specialist will assist you in starting an application.

Alternatively you can pop into a branch.

5. What does the conditional approval process typically involve?

Again, it’s pretty simple—your lender will look at how much you owe (loans, credit cards etc.), and how much you own (assets including cars, shares etc.). Typically, your lender will perform a credit check on you with an external credit bureau.

At this stage, your lender will most likely want some information about the property you are wishing to obtain a loan for ( postcode, type of dwelling etc.).

They’ll also want to know how much you earn (your wages/salary), and what your expenses typically are (food, utility bills, rent etc.).

6. So how does it work at NAB?

You’ll need to call us on 13 78 79 to start an application. A home loan specialist will run through things over the phone, which usually takes between 30 and 60 minutes. If the numbers stack up, you’ll be given conditional approval.

You’ll then get emailed a conditional approval certificate (valid for 90 days) which stipulates how much money NAB will lend you.

7. Can I put in an offer if I’m buying privately?

Yes you can. So long as the seller (and their sale conditions) allow.

You can set some purchase conditions. For instance, you might make your offer 'subject to finance', or 'subject to pest and building inspections'. It’s a good idea to get your solicitor or conveyancer to advise you on this.

Note: when you make a ‘subject to conditions’ offer, it’ll have an expiry date. You’ll want to factor in how long it’ll take to get final approval. Best check the timeframe out first with your banker.

8. Can I bid on that dream house at auction?

Once you have otained conditional approval, you'll be ready to take on the auctioneer. You can bid on a property at auction. If your bid is successful, you'll then need to gain full approval.

Part of the final approval process involves the bank valuing the property you have purchased (or plan to purchase). So be wary of paying more than a fair price for the property, as this may affect the bank's willingness to grant final approval.

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