What is a pre-approval?
At Well, we do offer the ability to get yourself pre-approved for a home loan. There are different types though, so let's go into the different types of pre-approvals below.
Pre-approvals come in different shapes and flavours depending on who you talk to.
An indicative pre-approval (or indicative approval) is a type of approval given to customers in order to make them feel a little more secure in what their home loan scenario entails. The name literally tells you everything - it's an indication.
It's simply a way of saying to you - based on these rough numbers, you look like you could be approved for your home loan.
An indicative approval doesn't take into account much about your true situation. There's no credit checks involved, there's no verification of your information, the assessment criteria uses basic averages and benchmarks.
What is an indicative pre-approval good for?
When you're ready to start the home loan process, this is the perfect way to get started. It's usually fast and simple and will give the right start to look around at your options. There's no point shopping for a home that's simply too far outside your budget.
If you're putting in an offer on a purchase with only an indicative pre-approval you could find yourself in a situation without finance. We highly recommend getting a fully assessed conditional approval prior to finalising your offer.
Fully assessed conditional approval
This is the bells and whistles right here. This means that the lender has looked over all your documentation, assessed your situation, run a credit report and confirmed that you really are good to go. There's always a "subject to", hence why it's called a conditional approval. Assuming the property that you find is suitable to the lender policy - you will have a home loan to get the house. If you've gone to the hassle of getting a fully assessed conditional approval, then it's important to check with your lender about their property requirements.
Updated on: 07/07/2022