Finance Pre-Approval – Is not what it seems

Securing finance approval can be frustrating especially if you are applying for your first home loan. The article explains the process and provides valuable tips on this topic.

Delays can occur mainly due to the time it takes for the processing of documents and delays that financiers face with obtaining a valuation for the property.

The most important thing to note is that pre-approval is not the same thing as unconditional approval. If you have obtained pre-approval to an application for finance you still need to include a subject to finance clause in the contract for the purchase of the property. For more information on ‘subject to finance’ clauses in contracts visit

When dealing with your financier it is very important to understand the difference between pre-approval and unconditional approval to your application for finance. Pre-approval means that your financier is willing to lend you the money to finance your purchase, however they need more information in order to commit. The further information is usually a signed contract of sale and a valuation of the property. Unconditional approval is official confirmation that your financier will fund the purchase of your new property.

As mentioned above, pre-approval means that there are still boxes to be ticked before your finance is unconditional. For example your financier will require a valuation of the property that is to their satisfaction, proof of ID (the 100 point check that you may be familiar with) and a contract of sale signed by you and the seller. However it is important to note that each financier is different and accordingly their requirements will differ.

It is important that you communicate with your bank before entering into a contract to purchase a property to find out what their requirements are for your finance application to become unconditional.

It is very important that you ensure that the finance condition in your contract gives you sufficient time to secure finance approval. In our experience 28 days is more than enough time in most situations. Some financiers will be able to confirm finance earlier, however it is all on a case by case basis as everyone’s financial situation is different.

Whether you are buying or selling property at an Auction in Tasmania, Cormiston Legal can assist. Please contact us on 03 6332 9353 or use our Contact form -

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