Whether you are a seasoned investor or a first time home buyer, the home loan application process can be daunting. It does help to understand the process itself, the required steps and the parties involved in a home loan approval process. Here are the different levels of approval and what they mean for you as a borrower.


This step involves pulling a credit report that indicates your credit score and credit-history as reported by your bank. Your lender will be able to see your payment history and lines of credit. Your lender will then be in a position to determine a home loan amount you qualify for. The benefit of undertaking a pre-approval step is that it saves you time since you will be able to focus on searching for mortgages within your price range. Pre-approvals show your seller that you are a serious buyer.

On spot approval

Many online lenders offer pre-approval loan application in as little time as 30 minutes. However, they do not have time to be assessed by the lenders’ credit department. This means that you are not guaranteed loan approval.


Here, the lender assesses your capacity to repay the amount you requested. Information about your salary and liability are scrutinised thoroughly. This happens following the submission of your current pay slip and bank statement showing saving evidence, synchronously attached to a duly filled and signed application form. Declaration of any existing debts, as well as proof of identification such as a driver’s licence, will also be required. Your potential lender will then make an overall judgment, the intricacy of your financial record will influence how long this takes. You need to be frank while disclosing your liabilities since a non-disclosure is a big red flag to your lender.

After the submission of the application, your home loan lender will be in touch to update you on the progress and also let you know of your home loan’s outcome. If they approve your loan, they will advise you on when you are going to get a formal letter of approval.

In case you need more information about home loans, you can contact us at Mortgage Australia for more information.