The result? Crushed dreams, lost deposits, and a whole lot of stress.
What Pre-Approval Actually Means
Three Costly Lessons from Buyers Who Thought Pre-Approval Was Enough
It's easy to mistake a pre-approval for a guaranteed green light, but the truth is, it's more like a provisional handshake. Lenders scrutinise the property you want to buy, your credit history, and even changes in your employment. The stories below highlight just how costly their checks can be:
Sam and Jordan had pre-approval for $850,000 and confidently won an auction at $830,000. They thought they were home. But when the lender reviewed the building’s strata report, they refused the loan because of cladding issues. The couple lost both the property and part of their deposit.
Case Study 2: The Forgotten Credit Card
Priya had a clean financial history—or so she thought. What she overlooked was her unused $15,000 credit card. The lender counted it against her borrowing power, slashing her maximum loan amount by $60,000. The apartment she’d already committed to suddenly slipped out of reach.
Case Study 3: The Job Change Surprise
Alex moved from full-time employment to contracting after receiving pre-approval. It was a career upgrade for him, but a red flag for the bank. His pre-approval was worthless, and he had to scramble to find a new lender.
Why Bother with Pre-Approval Then?
Because it’s still useful. Pre-approval gives you an idea of what you might be able to borrow, helps you focus your search, and signals to sellers that you’re serious. Just don’t mistake it for the finish line—it’s the warm-up, not the medal ceremony.
How to Avoid Heartbreak
- Get clear on your true limit. Work with a broker who can stress-test your finances and prepare for different scenarios.
- Check the property first. Some locations and property types will make lenders nervous. Know before you bid.
- Keep things steady. No new debts, no job switches, no major financial changes until settlement.
- Plan for contingencies. If one lender pulls out, a broker can help you pivot fast.
The Bottom Line
Pre-approval isn’t a guarantee—it’s just step one. Treat it like the final word, and you could lose money, time, and peace of mind. Treat it as a guide, and you’ll be prepared to make smarter, safer moves this auction season.
Ready to Buy with Confidence?
At Dream Catchers Lending, we’ll help you look beyond the pre-approval letter, understand your real borrowing power, and spot potential pitfalls before they become disasters.
This article is the first in our 8-part Buyer's Guide Series, designed to give you the knowledge, tools, and confidence to navigate the season without costly mistakes.