There are 3 types of approvals when it comes to applying for a mortgage.

1. Pre-approval: borrowers want to get pre-approval from the lender to make sure that they know the maximum amount they can borrow. The pre-approval usually comes with an amount that you can borrow based on your income serviceability and credit worthiness. Since lenders do not necessarily know what property you will be buying and the conditions of the property, it is still possible for the lender to decline your application after you have purchased a property due to issues with the property itself, such as postcode, size, zoning, etc. A pre-approval is normally valid for up to 3 months only.

2. Conditional approval: many lenders give a very quick approval subject to many conditions such as verification of your income, valuation, etc.  Borrowers need to pay attention to those conditions, a quick on the spot conditional approval shouldn’t be treated as a guarantee for finance.

3. Unconditional approval: after the lender is satisfied with everything and happy to lend you the money, they normally issue an unconditional approval. Most of the time, an unconditional approval almost guarantees the loan.

Although an unconditional approval normally doesn’t have any conditions attached to it, lenders can still walk away from their offer if there is anything fraudulent in the process, and the fraud may or may not have anything to do with the borrowers.