Pre-approval and final approval — two different things
Pre-approval is a bank statement that, based on your income, liabilities and credit history, you can apply for a loan up to a certain amount. It is not a final decision — it does not specify a particular property and does not obligate the bank to finance every purchase.
Final approval comes after the auction: the bank then assesses the specific property, carries out a valuation and makes a financing decision. This process takes 5–10 working days.
Before the auction you need precisely the pre-approval — a document that confirms your financial limits and lets you know how much you can bid.
What documents are required for the application?
Lithuanian banks typically request the following documents:
- Identity document — passport or ID card;
- SODRA statement of income received in the last 6 months — the primary proof of income;
- Bank account statements for the last 3–6 months, showing actual income and expenses;
- Employment contract or business income documents, if you are self-employed or run your own business;
- Existing loans and liabilities — the bank will check these automatically via the Credit Register.
If buying together with a spouse — documents from both partners are required.
How long does the process take and how long is it valid?
A preliminary answer after submitting the application — 1–3 working days. Some banks (e.g. Citadele) offer an initial online answer within minutes. However, the final written confirmation is usually issued within 3–5 working days.
Pre-approval is valid for 30–90 days, depending on the bank. After this period market conditions, interest rate indicators and your financial situation may change — so the application must be renewed.
Practical recommendation: submit the application no later than 2 weeks before the planned auction. This leaves time to receive the answer and, if the bank requests additional documents, to provide them.
What to do if the approved amount is too low?
If the bank's pre-approval amount falls short of what is needed for the desired object, there are several options:
- Increase the down payment — a smaller loan amount is easier to approve;
- Reduce existing liabilities — if monthly obligations exceed 40–50% of income, the bank may reject the application;
- Apply to another bank — different banks use different assessment models;
- Wait — if you expect income growth or plan to close existing loans, it may be worth waiting.
Important to know: participating in an auction with a pre-approval that does not cover the planned purchase is risky. It is better to skip an auction and wait for the right financial conditions than to lose the guarantee deposit.