By the time you apply for a home loan, you’ve done the hard thinking, run the numbers, found the right property, and gathered the paperwork. 

And when the bank messages with an Approval in Principle, it's exciting - and tempting to think the purchase is done and dusted.

It is an important step...but it’s not the final one.

You're nearly there: what you need next is a Formal Grant.

What an Approval in Principle really means

 An Approval in Principle is the bank’s initial indication of comfort with your application.

Based on your income, expenses, credit profile and supporting documents, the bank is effectively saying the loan makes sense based on the information you've submitted.

It confirms you can afford the loan amount you've requested and isn't raising any red flags. This is a reassuring signal: your application is credible and worth progressing. 

But the bank isn't committing just yet. 

Why the bank can't commit just yet - and shouldn't 

At the Approval in Principle stage, certain elements are still outstanding. These typically include:

• A valuation of the property

• Final verification of documentation

• Confirmation that all conditions are met

These checks protect both you and the bank. 

They ensure the property is appropriately valued, the paperwork is complete, and the loan is structured correctly.

When a loan becomes a Formal Grant

A Formal Grant is issued once everything is in place.

By this point, the bank has:

• Valued and accepted the property

• Verified all required documents

• Confirmed that conditions have been met

• Issued the final loan terms in writing

Only once a Formal Grant is signed can the bond move through to registration.

Where uncertainty creeps in

Many buyers assume that an Approval in Principle means the deal is now done and when conditions follow, it can feel a bit unsettling. 

Take heart - you haven't been singled out or asked to go above and beyond to prove you're worthy of the loan. Banks are legally bound to thoroughly complete its checks - and if it can't, delays arise from missing information or valuation issues. 

These are avoidable and where experience and preparation matter.

How BondExcel keeps the process steady

BondExcel’s role extends beyond securing an approval. We focus on guiding applications all the way through to registration, anticipating conditions and addressing them early.

By preparing accurate, bank-ready applications and managing the detail between buyers, banks, valuers and attorneys, we help keep momentum intact. We keep you informed, manage everyone's expectations and ensure there're no surprises. 

Our team take pride in maintaining a calm and structured approach to managing the 'devil in the detail' complexities. 

The takeaway

An Approval in Principle is a positive step forward. A Formal Grant is the point at which the bank formally commits.

Knowing the difference allows you to plan realistically, avoid unnecessary anxiety, and move through the process with confidence, supported by a partner who understands both the numbers and the nuance.