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3 reasons to get conditional approval first

We get it. Finding an affordable dream home is exciting! But that excitement can quickly sour if your lender declines your home loan application or the amount you are approved to borrow is not quite enough. But there's a pretty good fix. Applying for home loan conditional approval means you'll know your purchase price limit before you start house-hunting

What is conditional approval?

Conditional approval can be called different things by different lenders, from pre-approval, indicative approval or approval in principle but they all basically mean the same thing.

After you submit your application for a home loan, your application will be reviewed and assessed by your lender. If it meets the lending requirements, you'll be issued with a conditional approval letter. Then you'll know how much you can borrow, so you can start looking for a home.

The letter will also go through the conditions you need to meet to go through to formal approval.

Conditional approval can be useful whether you're going to buy an established house or a new home.

Three reasons to get conditional approval

Obtaining conditional approval from your lender can be beneficial in a number of ways.

  1. You'll get a clear indication of approximately how much money you can borrow, so you can better determine the price range you should be looking at. 
  2. Once you identify a home you want to buy, you can make an offer with the peace of mind that you can likely borrow the amount you need. 
  3. Your process to move to full loan approval should be smoother because you have completed a lot of the groundwork (and paperwork!) during the conditional approval process.

How to apply for conditional approval

To be conditionally approved for a home loan, you need to submit a loan application. Lenders require information such as evidence of employment and income, expenses, savings, assets, debts, and identification.

Our process

Applying for a home loan at Keystart starts with a two-step process.

  1. The first step is pre-qualification. You can find out if you qualify for a Keystart home loan within five minutes.
  2. You can then go on to start an application. Your dedicated home loan specialist will go through the application process with you and can answer any questions you may have.
  3. We'll then review all of your information and advise if you're conditionally approved for finance. 

Setting yourself up for success

It's possible to have your application for conditional approval declined if your application does not meet certain criteria or if a home loan isn't suitable for your situation. To avoid this, you can take steps now, like reducing unnecessary debts.

If you're conditionally approved, we'll let you know how much you can borrow and the monthly repayments you'll be required to make. We'll also let you know the conditions that you will need to meet before you move to formal approval of your home loan. 

If you make an offer on a property, make sure it's within the limits of your conditional approval amount and that your agreement to buy a property is subject to you obtaining the finance you'll need.