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Can you buy a property with conditional approval?

Conditional approval is no guarantee that you will secure a home loan, but it’s a great starting point.


In the lending world, ‘unconditional approval’ is the gold standard for home buyers. It means you have ticked all the boxes required by the lender and you can go ahead and buy your home.

Conditional approval, also known as pre-approval, sits slightly below unconditional approval. As the name suggests, it means full approval is conditional on you providing additional information. This could be as simple as you supplying evidence of your income.

More often than not though, conditional approval hinges on a valuation of the property you plan to buy. And this step can’t be completed until you’ve found the place that’s right for you.

Put yourself in a good position to buy a home

Having conditional approval under your belt definitely leaves you well positioned to buy a property. It tells real estate agents that you’re a serious buyer.

More importantly, your conditional approval will set out how much you can afford to borrow. Together with your buying deposit, this lets you know how much you can realistically pay for a property. As such, this makes conditional approval a valuable tool in the home buying process.

Making an offer

With conditional approval in place you can bid at auction or make an offer on a home being sold by private treaty.

Bear in mind, in both cases, the lender is likely to conduct their own valuation of the property. So be sure to stick to your buying budget, and use your own research to understand whether you’re paying a fair market price.

If you’re buying through private treaty you may have the option to make an offer ‘subject to finance’. This gives you some wiggle room in case your lender doesn’t come to the party with the funds you need. Speak with your broker before making this type of offer though because strict time limits usually apply.

Make a better buying decision

That bottom line is that conditional approval is worth having. Sure, it’s not the same as full approval. But it can go a long way in helping you make a better home buying decision.

 

Talk to your Mortgage Choice broker to discover the steps you need to take to secure conditional approval.

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