What's the difference between conditional and unconditional approval?
While buying a new home is an exciting experience, it can also prove very stressful, especially if you are competing for your dream home against a lot of other potential buyers. Thankfully, there are ways for you to get yourself ahead of the pack and lift your chances of securing that dream property – it all starts with loan pre-approval.
The different types of approval you can get for a home loan:
Pre-approval - This provides you with a conditional approval of a loan amount. Generally speaking, it is based on an assessment of your individual circumstances, needs and ability to repay the loan. A loan pre-approval will provide you with some clarity around the amount you can borrow, and therefore, what you may be able to spend on a property. As a result, it will stop you from looking at properties that are well outside your budget. Further, loan pre-approval will put you in a stronger position to negotiate with a vendor or bid at auction. It is important to keep in mind, that pre-approvals are usually a limited time offer usually for a period of three to six months, depending on the lender.
Unconditional Approval - Your loan application has been fully approved and is not subject to any terms and conditions. Your loans offer documents are generally distributed at this point. Once these documents are signed, returned and checked by the lender, your application will be moved to settlement.
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