No, pre-approval is the first step in the process of obtaining finance approval. To obtain pre-approval the bank will request certain financial documents from you to enable it to determine an amount that it would consider lendering you based on your repayment capacity.
Whilst this is the start of the formal approval process, the second stage must also be completed before you can safely enter into a contract to purchase a property. The second stage will only be started once you have found a property, this stage is called formal approval and it will require you to notify your preferred lender of the details of the property you are looking to purchase.
The lender will then complete a valuation of the property to ensure that the value of the property is sufficient to cover the amount of money you are looking to purchase. It can take a few weeks for this process to be completed so you should contact your lender as soon as possible after you find a property and your offer to purchase has been accepted.
Once this second stage has been completed by your lender (and the lender is happy to lend you the funds to purchase the property), you will receive written formal finance approval. This approval should be given to your solicitor so they know you can now proceed to exchange of contracts if everything else is in order.
If you have any questions or queries about pre-approval or finance with your property matter you can give us a call on 63312911.
Please note the answers provided are for your general information only and we ask that you call our office on 02 6331 2911 to obtain detailed legal advice for your individual situation.