Should I organise a loan before buying a property?

Should I organise a loan before buying a property?

Whether it is your first home or third property, it is an emotional journey and it’s easy to get carried away with the fun part of looking at houses. This should not distract from the less exciting, but equally important task of arranging finance as it will likely strengthen your negotiating position on both the property and the loan.

Buying property is an exciting time. Choices regarding location, size, number of rooms and local amenities often see house hunters carried away in a deluge of daydreams and anticipation.

Before getting caught up in the search, it’s important to get the essentials sorted first. Organising finance may seem boring in comparison to perusing sales listings, however gaining pre-approval with a lender will give you confidence about how much you can afford to borrow.

Firstly, you need to determine if you’re eligible to borrow money for a lender, including assessment of your ability to repay the loan. You do not want to find out after you’ve made an offer on a property that your credit history or deposit is not up to scratch.

Arranging finance before finding the perfect property will put you in a good position when it comes time to make an offer. When you do find the house you have always wanted, you can present to the seller and estate agent as a prepared applicant who is serious and reliable.

If you have conditional approval in place, it shows you mean business, and provides peace of mind that your financing will not fall through. Don’t be afraid to let the selling agent know too.

Sellers are most interested in completing their sale fuss-free and with steadfast funding, and showing that you are capable of both will help put you at the top of a potentially competitive list of applicants. Put it this way, if you were selling a property and received two offers for the same amount, and one was unconditional and the other was ‘subject to finance’, which one would you accept?

If you find and secure the purchase of a home without having your loan pre-approved by a lender, there are a few pitfalls that you risk running into.

Firstly, you run the risk of losing your initial non-refundable deposit that you need to put down to secure the property. This may differ depending on what state you live in, but the point is it always pays to be organised and have pre-approval in place.

Saving home loan applications to the last minute also leaves less time to find the most suitable loan and have it approved ahead of settlement.

If finance is an afterthought, it adds massive (unnecessary) pressure to the overall process. Spending time shopping around for the right loan and gathering paperwork to prove you can service the loan is not something that you want to rush.


The first step towards finding your new home is speaking to us to sort out your finances. Call Conquer Finance on 1300-513-467.


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