Getting pre-approved is one of the most important steps in buying your first home. It gives you clarity around your budget, shows agents and sellers that you’re serious, and puts you in a stronger position when making an offer.
At Luminate Financial Group, we work with first-home buyers across New Zealand every day. Many are surprised by how much smoother the process becomes once their pre-approval is sorted. In this guide, we’ll walk you through what pre-approval means, why it matters, and exactly how to get it done — step by step.
What Is a Pre-Approval?
A pre-approval (also called a conditional approval or approval in principle) is a letter from a lender confirming that you meet their lending criteria and that they’re willing to lend you a certain amount, subject to a few final checks.
It’s not a guarantee, but it’s the closest thing to a green light you can get before you’ve found a property.
Once you’re pre-approved, you know your maximum purchase price, what deposit you’ll need, and what your repayments might look like. This helps you avoid wasting time on homes outside your range and gives you the confidence to move quickly when the right one comes along.
Why Pre-Approval Matters
Without a pre-approval, you’re guessing. You might think you can afford a $750,000 property, but the bank may only lend you enough to buy a $650,000 property based on your income, debts, or deposit size.
When you’re pre-approved, you become a more attractive buyer. Sellers are more likely to take your offer seriously, and agents are more willing to engage. In competitive markets, this can make all the difference.
It also gives you time to fix any issues early — like missing documents, high credit limits, or account conduct problems — before you’re under pressure to meet a purchase deadline.
Step 1: Know What You’ll Need
Before applying for pre-approval, it helps to gather the key documents lenders will want to see. These typically include:
- Proof of income (pay slips or business financials if self-employed)
- Three months of bank statements showing income and spending
- Details of your deposit (savings, KiwiSaver, or gifts)
- A snapshot of your current debts and credit limits
- Valid ID and proof of address
If you're using KiwiSaver for your deposit, you’ll also need a KiwiSaver withdrawal letter.
Step 2: Talk to a Mortgage Adviser
You can go directly to your bank, but most first-home buyers benefit from using a mortgage adviser. Advisers compare multiple lenders, help you understand different borrowing limits, and often find solutions that banks don’t offer directly.
At Luminate, we help you prepare your application, check that everything meets current lending rules, and guide you on how to maximise your chances of approval. We also assess which banks or lenders are most likely to say yes based on your situation.
This saves you time and avoids unnecessary credit checks that could affect your score.
Step 3: Apply for Pre-Approval
Once your adviser has everything they need, they’ll submit your application to one or more lenders. The bank or lender will assess your income, expenses, credit history, and deposit to decide how much they’re willing to lend you.
Most approvals take between three to five working days, though some are faster. Your adviser will follow up with the lender and keep you informed.
The lender will issue a pre-approval letter confirming your maximum borrowing amount and any conditions that apply. These might include:
- Proof of a minimum deposit
- Confirmation that the property is acceptable security
- Conditions related to income, debts, or KiwiSaver withdrawal
- Expiry date (usually valid for 60 to 90 days)
Step 4: Understand Your Conditions
Pre-approvals come with conditions. For example, a bank might approve your borrowing but require that the property you buy has a clean building report, is freehold, and is located in an area they deem acceptable.
It’s essential to understand what these conditions are so you don’t run into issues later. Your adviser or lawyer will help you check each property you’re considering to ensure it meets the lender’s criteria.
Step 5: Stay Pre-Approval Ready
Once you’re pre-approved, don’t assume it’s set in stone. Your financial position must stay consistent. Avoid taking on new debts, changing jobs, or dipping into your deposit unless you’ve checked with your adviser first.
It’s also important to keep your bank accounts clean. Avoid unarranged overdrafts, bounced payments, or unusual spending patterns, as these could affect your final approval.
If your pre-approval expires before you find a home, it can usually be renewed — as long as your financial position hasn’t changed significantly.
Common Mistakes to Avoid
Here are some things that can trip up first-home buyers during the pre-approval process:
- Applying to multiple banks on your own and triggering unnecessary credit checks
- Using a bank that doesn’t count your full income or boarder contributions
- Underestimating how much your debts reduce your borrowing power
- Thinking KiwiSaver funds can be used for legal costs or LIM reports (they can’t — they’re for the deposit or settlement only)
- Assuming all properties are acceptable to the bank
A mortgage adviser can help you navigate these pitfalls and avoid costly delays.
Final Thoughts
Getting pre-approved is more than just ticking a box. It’s a chance to understand your position clearly, plan ahead, and put yourself in a strong position as a buyer. When done right, it gives you confidence, speed, and leverage.
At Luminate, we specialise in helping first-home buyers get mortgage ready. We’ll guide you through every step of the pre-approval process, explain your options clearly, and help you move forward with clarity and confidence.
Ready to get pre-approved with the right lender?
Book a free First-Home Planning Session with Luminate.
We’ll help you gather documents, prepare your application, and secure a pre-approval that works for your goals.
Visit www.luminate.co.nz | Email askus@luminate.co.nz | Call 0800 333 400
