What Happens After Pre-Approval? (And Where Deals Often Fall Over)

Getting pre-approved is a huge milestone in the home loan journey. It gives you confidence, a clear budget, and the ability to shop with purpose.

But here’s the part many borrowers don’t realise…

Pre-approval is not a guarantee.
And the time between pre-approval and formal approval is where deals most commonly fall over.

Let’s break down what actually happens next — and how to make sure your approval stays on track.

What Is Pre-Approval, Really?

Pre-approval (also called conditional approval) means a lender has reviewed your initial financial position — your income, debts, and general living expenses — and is comfortable in principle to lend to you.

However, it’s based on:

• The information available at the time
• Assumptions about your situation staying the same
• No specific property yet (in most cases)

Once you find a property, the lender will reassess everything before giving formal approval.

How Long Does Pre-Approval Last?

Most pre-approvals are valid for 90 days (sometimes 60–120 days depending on the lender).

If it expires:

• You’ll usually need to reapply or refresh your application
• Your finances will be reassessed under current lending policies and interest rates

👉 This matters because borrowing power can change — even within a few months.

What Happens Between Pre-Approval and Formal Approval?

Once you’ve found a property and had an offer accepted, your broker or lender will:

1. Submit the full application
2. Order a valuation on the property
3. Re-check your financial position (yes — again)
4. Confirm nothing significant has changed

If everything stacks up, you move to formal approval and then settlement.

Sounds straightforward… but this is exactly where things can go wrong.

Where Deals Often Fall Over

1. Changes to Your Employment

Lenders love stability.

Red flags include:

• Changing jobs (even for a higher salary)
• Moving from full-time to casual or self-employed
• Being in a probation period

👉 Even a “better” job can delay or derail approval if it introduces uncertainty.

2. Taking On New Debt

That “small” purchase can have a big impact.

Common culprits:

• Car loans
• Credit cards (even unused limits count)
• Buy Now, Pay Later accounts
• Personal loans

👉 Lenders reassess your serviceability, and new debt reduces borrowing capacity.

3. Changes in Spending Habits

Lenders don’t just look at income — they look at how you use it.

Increased spending in areas like:

• Dining out
• Subscriptions
• Shopping or discretionary expenses

…can impact your application when your bank statements are reviewed again.

4. Property Valuation Issues

Even if you’ve agreed on a purchase price, the lender needs to confirm the property’s value.

If the valuation comes in lower than expected:

• You may need to contribute a larger deposit
• Or renegotiate the purchase price

👉 This is one of the most common deal-breakers.

5. Credit Score Changes

Your credit file is checked again before formal approval.

Things that can hurt your score:

• Applying for multiple loans or credit cards
• Missing repayments
• New enquiries appearing on your file

6. Policy or Rate Changes

Lenders can update their policies at any time.

This can affect:

• Borrowing capacity
• Accepted income types
• Deposit requirements

👉 Even if nothing changes for you, the rules might.

How to Protect Your Pre-Approval

The safest approach?
Keep everything as stable as possible until settlement.

That means:

• Don’t change jobs (if you can avoid it)
• Avoid new debts or credit applications
• Keep spending consistent and reasonable
• Continue making all repayments on time
• Talk to your broker before making any financial decisions

The bottom line

Pre-approval puts you in a strong position — but it’s not the finish line.

Think of it as a green light to proceed, not a guarantee.

The period between pre-approval and formal approval is where careful decisions matter most. A few small changes can have a big impact, but with the right guidance, it’s easy to stay on track.

Need help navigating the next step?

That’s where a good lending specialist makes all the difference – keeping your application on track and stepping in early if something doesn’t look right. Get in touch with one of our local specialists today.

This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.