Approval's - what's the deal?

There are a couple of types of approval you are likely to receive...ready below to get the scoop on what they are.

When you receive conditional approval for a home loan, it means the lender has reviewed your application and is inclined to approve the loan, but there are still one or more specific conditions that need to be met. These conditions might include providing additional documentation that was missing in the application, such as a boarder letter, or meeting certain requirements, like repaying and closing a credit card. This approval is made after you have submitted your loan application and can occur either before or after making an offer on a property.

Conditional approval is an important step in the home-buying process as it indicates that the lender is willing to move forward with your loan application, provided you satisfy the outlined conditions. It offers you a sense of security knowing that your loan is likely to be approved once you meet these conditions.

Achieving unconditional approval, on the other hand, is the ultimate green light to proceed with your property purchase. Once you have unconditional approval, it means you are fully approved for the loan, and there are no further conditions to meet – from a finance point of view of course as there may be other conditions in your sale and purchase agreement.  With unconditional approval, you can confidently proceed with the property purchase, knowing that your financing is secure.

Unconditional approval typically comes after all conditions outlined in the conditional approval have been met and verified by the lender. This includes completing any necessary property valuations, getting your home insured, and meeting any additional lender-specific requirements. Once these conditions are satisfied, the lender will issue the unconditional approval.

This is a significant milestone in the home-buying process as it confirms that you have the necessary financing in place to complete the purchase. After achieving unconditional approval, you can finalise the Sale & Purchase agreement, knowing that the lender will provide the funds needed to buy your new home.

In summary, conditional approval is a provisional step indicating the lender's willingness to approve your loan subject to certain conditions, while unconditional approval is the final confirmation that your loan is fully approved, allowing you to proceed with your property purchase confidently.