Home loans: Do you need preapproval?

No matter what anyone tells you, it's not easy to find a home that fits your budget and suits your current and future needs. Many houses will be too small for the family you want to have, too noisy or simply too pricey. So, when you do come across the property that ticks all the right boxes, you’ll want to be able to seal a deal as quickly as possible.

The best way to make an offer quickly and confidently is to have a preapproved home loan. Here’s how the process works and why you should consider it:

What is preapproval?

Preapproval is not an actual loan. It is merely an indication of how much you could qualify for if you want to apply for a home loan. Nor is this a long, drawn-out process because you’re not yet submitting all your paperwork. A preapproval is an estimate from the bank to say it’ll be happy to give you a loan for this amount, should your paperwork be in order.

The preapproval process is quick, non-binding and can be done online. All you have to do is submit basic information, such as your income and expenses. The bank needs this information to do an affordability and credit bureau check and to determine how much you could qualify for, based on your current circumstances.

What does it involve?

The Nedbank preapproval process is an online tool designed to give you an estimate of the loan amount you may qualify for. It allows you to capture your household’s and other income, such as rent, investment interest or side-hustle money.

You then list all your expenses, ie how much you spend on everything from running your household to debt repayments, insurance, medical aid, school fees, entertainment, transport, etc. This provides a more accurate picture of how much you can afford to pay every month on your bond repayments.


Timing could be key to getting your dream house, especially if it’s a sought-after property that more potential buyers are also interested in


You need to be absolutely honest when listing all your income and expenses because you must provide documentation supporting those figures when you apply for the actual home loan – so there’s no point in fudging the numbers during preapproval. The bank will review the information and let you know how much you qualify for. The bank considers factors such as the interest rate, your disposable income and deposit amount.

The benefit of applying online is that you will also qualify for cash back of up to R20,000 and get a 50% discount on your bond registration fee. T&Cs apply. You’ll also receive an estimate of the legal fees for the bond registration and property transfer process.

Speed and decisiveness

Although not yet a loan, a preapproval gives you confidence when shopping around because you already know what you can afford.

It’s something that sellers also look on favourably because it means they can get a deal done quickly and with minimal hassles. Timing could be key to getting your dream house, especially if it’s a sought-after property that more potential buyers are also interested in. The promise of a quick sale is always appealing to a seller, which may help you seal the deal.


Did you know that on average, Nedbank pays out around R1.8 million a month in cash back on home loans? In 2023, we paid out more than R20 million in cash back on home loans. For an affordable home loan tailored to your circumstances and value-added extras like up to R20,000 cash back and a 50% discount on your attorney bond registration fees, choose the bank that’s best for your money.

*Terms and conditions apply.