What question is this article answering?

This article answers: what does first home buyer pre-approval mean, and when should you start? In short, pre-approval is a lender’s initial assessment of what you may be able to borrow before you find a property. It can help you shop with more confidence, but it is not the same as unconditional approval.

Key takeaways

• Pre-approval can help you understand your likely borrowing capacity before you make an offer.

• Your borrowing power depends on income, expenses, deposit, debts and the lender’s assessment policy.

• Speak with a mortgage broker before house hunting so you know your position early.

Example

If you are planning to buy in the next three to six months, a pre-approval conversation can clarify how much deposit you may need, what repayments could look like and whether a first home buyer scheme may apply to your situation.