What Is a Conditional Approval and Why Should You Get It?

If you are on your move to finding your dream home, you probably have heard advice on how you should consider getting pre-approved for a home loan. Before you do so, it is better if you know exactly what it is and why it is an essential step to home purchasing. This article will explain the important details you need to know about home loan conditional approval.

What Is a Conditional Approval?

Conditional approval means that your application for a home loan has already been assessed and pre-approved but not yet finalised. The lender would need a few more requirements before they approve your home loan application for good, but in essence, they are mostly satisfied with it. 

Once you get pre-approved, it establishes your capacity to pay your loan and gives you an estimate of how much the lender would offer you to borrow. 

Many lenders use different terms for this state. Besides conditional approval, they also call it pre-approval or approval-in-principle, but they all refer to the same thing.

When Should You Get a Conditional Approval?

If you are considering getting serious with your home search and not simply shopping for options, you might want to consider getting a pre-approval status. It is a good idea if you want to know how much you are allowed to borrow and how much you can afford to pay. 

Home loans come in varied options. Therefore, a pre-approval could help you decide budget-wise―where you plan to get your home loan, how much you should borrow, what your budget for your home purchase would be, and many other financial considerations. 

However, note that every approval has its expiration date. Usually, the conditional approval lasts for 90 days from your application date, but you can always try applying again once you reach your deadline. It would be best to make your application if you plan to purchase a house within that period. 

That way, you can also secure the house fastly. You only need to pass a few more requirements with a pre-approved status, and you are guaranteed a home. Not having one from the start could end with you not getting approved and the house going to another buyer. 

How Will It Help With Home Search?

If you are still thinking about whether a pre-approved application would be beneficial to you or just an added task, here are some of the advantages it could bring:

  • When home sellers found that you already have a pre-approved home loan application, they would see you as a serious buyer already looking for a new place to stay. Therefore, treating you earnestly as well. 
  • Since you know that a lender would allow you to borrow money, you would be more confident when looking for a house.
  • At the same time, it would keep you grounded and restricted. You might have an idea of the amount you could spend. Therefore, you can limit your search to that specific budget, reducing the amount of wasted effort from you and your broker’s end. 

How to Apply for a Conditional Approval?

The steps are pretty simple. All you need is to find a lender you are interested in and then apply to their home loan conditional approval service. Most lenders’ websites now take in online applications. 

Like other loan processes, expect the lender to check your credit score and how much you owe and own. If you are eyeing a property, they might ask for information about it, such as the type of property, postcode, and other vital details, so they can assess how much they can assist you financially.


Conditional approval might be an additional step before purchasing a property, but it could also speed up your home buying process later. It is a worthwhile pursuit should you want a clearer perspective on your property buying venture and if you need to have confidence as a future homeowner.

If you are a first-time home buyer looking for financial assistance, we can help you. FinanceCorp researches over 25 lenders to find what suits your needs. All of the Finance Managers at FinanceCorp are fully qualified, trained, and experienced mortgage professionals who live and breathe finance. Enquire with us today at 08 9417 5550.