Understanding the home loan approval process

Understanding the finance approval process can help make applying for a mortgage less confusing. From conditional approval to full loan approval, we break down the stages for you – when to apply, what’s involved and what you need to do.

Conditional approval

Before you start your property search, it’s worth getting conditional approval for a home loan. It’s a letter from your lender that indicates how much they’re likely to let you borrow based on a review of your financial details, goals and requirements.

Reasons to get conditional approval

It gives you a clear idea of what properties you could realistically afford. It also puts you in a strong position when you make an offer, as it shows the seller and real estate agent that you’re a serious buyer.

In Melbourne and Sydney, where properties often sell at auction, it’s wise to get conditional approval before making a bid. Conditional approval may give you an advantage in private sales too - especially in WA.

Applying for conditional approval

A Home Finance Manager or Broker can help. You’ll need:

  • ID
  • Income evidence
  • A summary of your living expenses, assets and liabilities (what you currently own and your current personal debt).

Full loan approval

When you make an offer on a property, you usually sign a contract ‘subject to finance’. After your offer’s been accepted, you can apply for full loan approval with the bank.

Applying for full loan approval

Recent pay slips, the signed contract of sale and your ID are usually required. See how to apply and what you need to provide in more detail.

A Home Finance Manager or Broker can help you find a loan that’s right for you and your financial situation. Find out more about the different home loan types and take a look at our range.

After you apply

Your application will be assessed again, and the bank will carry out a valuation of the property (usually one-two business days from when they have access to the property).

The bank will usually value the property at the purchase price, although occasionally they’ll come back with a value lower than what you’re paying. This is in your best interest to make sure you’re not unknowingly overpaying.

If the bank values it less, but you love the property and have the extra funds to cover the difference, you may still be able to buy it. Otherwise, your loan will be declined. Your Home Finance Manager or Broker can help you with your options.

You’ll be kept up to date on the progress of your application by your lending specialist. You can even track the application yourself in real time.

After your loan’s been unconditionally approved

Once the bank has confirmed they’ll give you a loan, they’ll issue contract documents. Your Home Finance Manager or Broker will talk you through them to make sure you understand everything properly. Send them back to the bank with your building insurance documentation.

The bank will then verify the contracts and settlement will be booked. Find out more about settlement and how to prepare for it.

Settlement day

Your lender, together with your settlement agent or solicitor, will meet with the legal and financial representatives of the seller to exchange documents. They’ll also arrange for the balance of the property’s purchase price to be paid to the seller, and you’ll see your deposit leave your account.

After settlement

We’ll confirm that everything is in place for your loan, and your first repayment will be due one month after the settlement date. If - like most people - you’re making principal and interest repayments, you can choose to pay weekly, fortnightly or monthly.

What’s more, there are some things you could start doing straight away to help you save money on your mortgage – take a look at some tips.

Find a home loan to suit you

Browse our range of home loans.

Ask an expert


Get in touch with one of our Home Finance Managers, and they’ll respond within one business day.

Things you should know

The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.