Pre-Qualify for a Home Loan: What You Need to Know
If you’re buying a home for the first time but don’t know where to start, getting pre-qualified for a home loan can be a good jumping off point.
What is a home loan pre-qualification?
When you apply for a home loan or mortgage pre-qualification, the lender will give you an estimate of how much you could borrow and what your possible loan options are based on financial information you’ve provided.
It’s a less involved process compared to applying for pre-approval or a formal home loan. The home loan pre-qualification process varies depending on the lender. Generally, you’ll be asked to fill out a form asking about your income, expenses, and other pertinent financial information.
What do you need to pre-qualify for a home loan?
You can apply for a pre-qualified mortgage at loans.com.au by filling out our online form. You’ll be asked about the type of loan you’re looking for (buying, building or refinancing), and whether it’s for personal use or investment. After that, you’ll just need to input your personal and financial information, and we’ll see if you qualify for a home loan.
Does getting pre-qualified affect your credit score?
Getting pre-qualified for a home loan does not affect your credit score. Home loan pre-qualification does not involve thorough verification and only pulls a soft enquiry into your credit, as opposed to a hard enquiry, which may temporarily lower your credit score by a few points.
Home Loan Pre-Qualification vs Home Loan Pre-Approval
Mortgage pre-qualification and pre-approval are sometimes used interchangeably. While they have similar uses, they are completely different in terms of requirements and overall process.
| Pre-qualification | Pre-approval | |
|---|---|---|
| Requirements | Pre-qualified home loan application form, self-reported financial information | Mortgage application form, credit history, financial documents (e.g., proof of income, savings, bank statements, etc) |
| Financial data | Not verified by lender | Verified by lender |
| Credit check | Soft enquiry | Hard enquiry |
| Fees | Usually free of charge | Usually free of charge |
| Application process | Typically, within 24 hours of application | Typically, within 1 to 2 days of application |
| Duration | Does not expire but is only based on your financial information provided at the time of the pre-qualification | Typically |
| Benefits | Get an idea of how much you can borrow, see possible home loan options | Know how much you could borrow, including potential interest rates; can be used as leverage during house search, speeds up buying process, one step closer to formal home loan approval |
Does applying as a couple affect getting pre-qualified for a home loan?
Applying as a couple may affect your home loan pre-qualification as it changes your financial capabilities. You could have stronger borrowing power if you have dual income and shared expenses. Your home loan pre-qualification depends on your finances.
Can you pre-qualify for a mortgage if you’re self-employed?
Those who are self-employed can still pre-qualify for a home loan at loans.com.au. All they need to do is fill out the online form and wait for the results. As long as you meet certain lending requirements, you may pre-qualify for a mortgage.
If you’d like to know more about the home loan process, get in touch with the friendly lending specialists at loans.com.au today!
Find out in under 2 minutes if you qualify for one of our home loans.
About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
