Transaction Policy & Timing
Understanding loan approval pipelines, legal settlement dates, and policy changes.
Core Assessment Analysis
The period from pre-approval to settlement involves a series of milestones where the lending assessment can change, conditions can shift, and approvals can lapse. Understanding this timeline is important for borrowers making time-sensitive property decisions. **Pre-approvals** are conditional indications that a lender may lend up to a specified amount, based on information provided at the time. They are not a guarantee of funding. Most pre-approvals are subject to a satisfactory property valuation, final document verification, and a credit assessment that confirms the borrower's circumstances have not changed materially. **Policy changes during the transaction** can affect a pre-approval. Lenders can and do update their assessment rules — stress rate buffers, income shading percentages, acceptable property types — between the time a pre-approval is issued and the time formal approval is sought. A pre-approval issued under one policy regime may not survive reassessment under a revised one. **Settlement timing risk** is the gap between exchange of contracts (when the borrower commits legally to the purchase) and final settlement (when funds are released). Events that occur in this window — a change of employment, a new credit inquiry, a change in the property's valuation — can affect the approval. **Interstate differences:** NSW and QLD have different legal timing conventions for property contracts. NSW typically involves a 5-day cooling-off period after exchange; QLD typically uses a 14-day finance clause. These differences affect how much time is available to obtain formal approval and what the consequences of a failed condition are. This hub links to five subpages: - [What pre-approval really means](/assessment-pillars/borrower-profile-policy-sensitivity/transaction-policy-timing/what-pre-approval-really-means/) - [Why approvals expire](/assessment-pillars/borrower-profile-policy-sensitivity/transaction-policy-timing/why-approvals-expire/) - [What can change before settlement](/assessment-pillars/borrower-profile-policy-sensitivity/transaction-policy-timing/what-can-change-before-settlement/) - [How timing affects settlement](/assessment-pillars/borrower-profile-policy-sensitivity/transaction-policy-timing/how-timing-affects-settlement/) - [Buying interstate — NSW vs QLD timing](/assessment-pillars/borrower-profile-policy-sensitivity/transaction-policy-timing/buying-interstate-nsw-vs-qld-timing/)
Why Underwriters Focus Here
The gap between pre-approval and formal approval is a period of genuine risk. Lenders reassess at formal approval — income must still be verified, the property must be valued, and the borrower's circumstances must not have changed materially. Policy settings at the lender may also have shifted. Understanding this timeline helps borrowers avoid decisions based on an assumption of guaranteed funding that does not exist.
Key Outcome Assessment Factors
How recent the pre-approval is, whether lender policy has changed since it was issued, whether the borrower's employment or financial position has changed, whether the property valuation aligns with the contract price, and the settlement timeline relative to the approval expiry date.
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