What is pre-approve?
Last updated: 6 Aug 2025
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For those who have previously purchased a home or are currently negotiating with a bank and are considering a home loan, you likely understand and have gone through the pre-approval process to some extent. However, many others, including those preparing to buy their first home, may not fully understand the purpose and meaning of the pre-approval process. Here's a summary of interesting points: What is pre-approval? Prepare the necessary documents. Read this to gain understanding before negotiating with the bank.
What is pre-approval?
Typically, when applying for a home loan with a bank, the bank's staff will conduct one process. Pre-approval is a preliminary screening process. The bank will use two criteria for consideration: 1. Financial status and 2. Debt serviceability (DSR). The bank will review your income and monthly debt obligations. If the results show that your income meets the criteria and your debt obligations do not exceed the required level, the applicant has passed the pre-approval process.
However, using these criteria does not guarantee a 100% home loan approval. After the pre-approval process, there are several other criteria and steps that must be considered. This includes assessing the property, house, condo, and other documents and collateral. Finally, the bank must reapply for approval. However, this preliminary review will initially guarantee the customer's loan approval percentage, allowing for further resolution.
For government officials or permanent employees with a steady income, the waiting period is 2-3 weeks. For business owners, entrepreneurs, and freelancers, approval may take longer, sometimes as long as 4 weeks. During this time, additional documents may be requested from the bank. Borrowers should allow this time.
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Advantages of Pre-Approval
1. Understand your readiness and ability to repay the loan amount requested.
2. If your Pre-Approval application is rejected, our staff will explain the reasons and provide solutions on a case-by-case basis, such as credit bureau issues or excessive loan amounts after deducting debt.
3. No fees, reducing the chance of loan rejection and the loss of the deposit or contract fee.
4. No credit damage if the Pre-Approval is rejected.
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Documents Required for Pre-Approval
Copy of ID Card
Copy of house registration
Copy of bank statement for the past 6 months
Copy of payslip (permanent employee) / salary certificate
Copy of withholding tax certificate or proof of tax payment for self-employed individuals
Bank loan application
Consent to a credit bureau check
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Pre-approval does not guarantee loan approval. So why submit it?
Knowing the Pre-approval result helps borrowers assess their repayment ability, whether they can afford the home or condo loan within the loan limit. If they are not approved, Pre-approval allows them time to re-plan their income allocation or find ways to increase their income. Banks typically take 3-5 days to complete the assessment to inform them of the combined income from other sources that qualify them for a home loan at the appropriate rate.
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Why is Pre-approval approved but not approved?
There are several key reasons why banks reject home loan applications, including documentation, financial readiness, job stability, spending behavior, and current debt. In addition to considering personal financial information, Banks must consider the property, house, and condo prices to determine whether the applicant can afford the repayments. Pre-approval is only a preliminary screening process, so it's not uncommon for applicants to fail at this stage and fail when the bank rejects their loan. This situation is common with many customers.
However, even passing the pre-approval process doesn't guarantee a 100% loan approval, as detailed in the Real Estate Information Center. After the initial screening, the officer must submit the customer's details to the bank's head office for further review along with other criteria. Pre-approval only indicates the applicant's ability to repay the loan, whether they can afford the home loan or not. In some cases, the bank may not approve the loan after passing this step.
However, even if the pre-approval is rejected, the officer will help inform the borrower of the problem and find a solution. Borrowers want a home, and banks want their customers as well. Pre-approval is a very beneficial process for borrowers. It can verify their ability without damaging their credit.
___________________________________________
Source of this article: Real Estate Information Center
What is pre-approval?
Typically, when applying for a home loan with a bank, the bank's staff will conduct one process. Pre-approval is a preliminary screening process. The bank will use two criteria for consideration: 1. Financial status and 2. Debt serviceability (DSR). The bank will review your income and monthly debt obligations. If the results show that your income meets the criteria and your debt obligations do not exceed the required level, the applicant has passed the pre-approval process.
However, using these criteria does not guarantee a 100% home loan approval. After the pre-approval process, there are several other criteria and steps that must be considered. This includes assessing the property, house, condo, and other documents and collateral. Finally, the bank must reapply for approval. However, this preliminary review will initially guarantee the customer's loan approval percentage, allowing for further resolution.
For government officials or permanent employees with a steady income, the waiting period is 2-3 weeks. For business owners, entrepreneurs, and freelancers, approval may take longer, sometimes as long as 4 weeks. During this time, additional documents may be requested from the bank. Borrowers should allow this time.
___________________________________________
Advantages of Pre-Approval
1. Understand your readiness and ability to repay the loan amount requested.
2. If your Pre-Approval application is rejected, our staff will explain the reasons and provide solutions on a case-by-case basis, such as credit bureau issues or excessive loan amounts after deducting debt.
3. No fees, reducing the chance of loan rejection and the loss of the deposit or contract fee.
4. No credit damage if the Pre-Approval is rejected.
___________________________________________
Documents Required for Pre-Approval
Copy of ID Card
Copy of house registration
Copy of bank statement for the past 6 months
Copy of payslip (permanent employee) / salary certificate
Copy of withholding tax certificate or proof of tax payment for self-employed individuals
Bank loan application
Consent to a credit bureau check
___________________________________________
Pre-approval does not guarantee loan approval. So why submit it?
Knowing the Pre-approval result helps borrowers assess their repayment ability, whether they can afford the home or condo loan within the loan limit. If they are not approved, Pre-approval allows them time to re-plan their income allocation or find ways to increase their income. Banks typically take 3-5 days to complete the assessment to inform them of the combined income from other sources that qualify them for a home loan at the appropriate rate.
___________________________________________
Why is Pre-approval approved but not approved?
There are several key reasons why banks reject home loan applications, including documentation, financial readiness, job stability, spending behavior, and current debt. In addition to considering personal financial information, Banks must consider the property, house, and condo prices to determine whether the applicant can afford the repayments. Pre-approval is only a preliminary screening process, so it's not uncommon for applicants to fail at this stage and fail when the bank rejects their loan. This situation is common with many customers.
However, even passing the pre-approval process doesn't guarantee a 100% loan approval, as detailed in the Real Estate Information Center. After the initial screening, the officer must submit the customer's details to the bank's head office for further review along with other criteria. Pre-approval only indicates the applicant's ability to repay the loan, whether they can afford the home loan or not. In some cases, the bank may not approve the loan after passing this step.
However, even if the pre-approval is rejected, the officer will help inform the borrower of the problem and find a solution. Borrowers want a home, and banks want their customers as well. Pre-approval is a very beneficial process for borrowers. It can verify their ability without damaging their credit.
___________________________________________
Source of this article: Real Estate Information Center
