The 7 key steps to securing a mortgage pre-approval

Why obtain a mortgage pre-approval?

In the current environment, it’s vitally important to be in the strongest possible position to buy your next property.

The latest available figures show that property stock on the market is at the lowest level in years for this time of year, so buyers need to be well prepared and able to act decisively.

A formal mortgage pre-approval stands buyers in the best possible stead.

Today let’s take a look at the key steps involved, and why it’s so important.

The 7 key steps to securing a mortgage approval

Applying for a mortgage is a specialist activity that often requires specialist help.

To that end, we teamed up with expert mortgage broker Steven Ress of Ressfin to help explain the key steps in the process of applying for a mortgage, and why it’s so important.

Let’s take a look, with Steve’s generous assistance:

Make sure your approval is in place before you commence the property search to reduce your stress levels when purchasing a property. This will allow you to act quickly should an opportunity arise without having to wait for the bank’s approval, potentially leading you to miss out on a property;

• Ensure you have no late repayments on credit cards or loans and no prior defaults. Equifax offers a free service for performing a check on your credit history prior to lodging a pre-approval application. You don’t want to lodge an application for it to show a decline on your credit history;

Pre-approvals can take anywhere from 48 hours to 3 weeks depending upon the current turnaround times of lenders, with blow-outs especially prevalent since the onset of COVID-19. To ensure you are selecting expect 2 to 3 weeks for a pre-approval

• Remember, a pre-approval is not a formal loan approval. If you are purchasing a property that is not subject to finance you could potentially face valuation risk if the valuer values the property below the purchase price (unlikely with an auction). The risk here is that you don’t have the funds to complete. A pre-approval does not cover you for valuation risk, so make sure your broker gets your loan formally approved prior to expiry of the finance clause or the cooling off period. This is not possible with an auction, but the risk is lower;

• Make sure your loan application is fully assessed. Nowadays the banks don’t want to be lumbered with pre-approval applications as the customer often does not go through with purchasing a property. We are now seeing banks provide brokers with automated pre-approvals only for the full assessment to be done later. This potentially poses a risk for the customer who is expecting the bank to provide funding on a purchase. Banks through their various credit checks might pick something up that even the customer is not aware of, potentially causing a problem with the loan approval once assessed;

Using a bank branch informally rather than a broker can sometimes be risky. The branch bankers sometimes provide indicative approvals. If these are not fully assessed applications they should not be relied upon; and

A pre-approval is typically only valid for 3 to 6 months. If your employment circumstances have changed during this time the pre-approval should not be relied upon and the lender needs to be notified of the changes.

As you can see there are a number of key steps to understand and cover off.

An experienced and licensed mortgage broker can be worth their weight in gold to help guide you through this process, providing you with all the different options.

With a mortgage pre-approval you will be in the best possible position to proceed with confidence.

Steven Ress can be contacted at and his website is

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