Pre-approval is not approval. Here is what it does promise.

Pre-approval is one of the most misunderstood documents in the process. It is genuinely useful, but it is conditional, and the conditions are where people get caught. What pre-approval does: it means a lender has assessed your income, commitments, deposit and credit history and is willing, in principle, to lend a stated amount. It gives you a number to house-hunt with and, importantly, it lets a vendor or agent take you seriously. What it does not do: it does not guarantee that a specific property will be approved. The property itself is assessed. Lenders order a valuation. Some properties are unacceptable to some lenders because of construction, leasehold arrangements, apartment size or body corporate issues. A pre-approval with no property attached tells you nothing about the house you are about to bid on. Conditions you will typically see: a satisfactory registered valuation, confirmation of your deposit and its source, verification of your employment, and sometimes a condition that your circumstances have not changed. Some pre-approvals carry a cap on the loan-to-value ratio for the specific property. Two practical points. First, pre-approvals usually expire after 60 to 90 days, so the timing of when you get one matters. Second, the conditions assume nothing changes. Changing jobs, taking on new finance or a large unexplained transaction in your accounts between pre-approval and settlement can undo the work. If you are buying at auction, this matters most. Auctions are unconditional, so before you bid you want the property itself to have been assessed, not just your income. Ask for that specifically rather than assuming your pre-approval covers it.