The particulars of pre-approval Home buyers seeking to get a clearer picture of how much they can borrow can benefit from getting a home loan pre-approval. Pre-approval is a lender’s written assessment of your creditworthiness for a loan. The assessment includes your ‘ability to repay’ a loan, based on your income; living expenses; and repayments for existing loans, plus an assessment of your ‘willingness to repay’ a loan, based on a number of factors such as your credit history, the stability of your employment and the number of times you change residential address. Why pre-approval is helpful Pre-approval brings peace of mind during the home hunting process, knowing that finance is on hand when you’ve found the home you’re ready to buy. Usually valid for 3 months, pre-approval can be renewed if finding a property is taking a while. Not all pre-approvals are created equal Pre-approval is not a guarantee of finance. Some pre-approvals – particularly those done in a few minutes, online, or by phone – won’t properly test your ‘ability to repay’ or your ‘willingness to repay’.