What is conditional approval?

Home loan pre-approval (or conditional approval) means that a lender has agreed, in principle, to lend you money towards the purchase of your home but hasn’t proceeded to full or final approval. Getting pre-approved for your home loan allows you to look – and enquire – with confidence. Here are eight commonly asked questions about conditional approval, that important first step in the home buying journey.

1. Do I need conditional approval?

Most people at an open house aren’t looking to buy that particular house. 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 like:

  • Working out your borrowing capacity using our various financial tools and calculators.
  • Working out how much you can afford to repay.
  • Looking at the local property market and suburb you’re interested in.
  • Viewing the different home loans we have, and using our product selector if you’re not sure which one is the right fit for you.

Don’t apply too early - our conditional approval is valid for 90 days from application, but you can apply again.

4. How do you apply?

It’s pretty straightforward. You can book an appointment with NAB home loan expert who will guide you through the entire process. Alternatively, you can visit a branch, call us on 13 78 79 .

5. What does the conditional approval process typically involve?

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 or 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 or book an appointment. Your appointment can be in person, over the phone, via video or we can come to you. Your appointment will usually take around 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. How long does pre-approval take?

The length of time it takes to get conditional approval depends on your individual circumstances. In some cases, it takes a few hours. In other cases, it may take a few weeks.

Speak to your lender to get an estimate of how long your pre-approval may take.

8. 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.

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

Once you have obtained 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.

We know that the home loan process can be daunting. When the time comes, don’t feel like you have to do it on your own. You can visit a branch, call us on 13 78 79 or set up an appointment. Your appointment can be in person, over the phone, via video or we can come to you. Or if you’re ready, feel free to apply online.

Ready to purchase your home?

Talk to our home loan experts today.

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Important information

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.