Do you want to get a home loan but don’t know where to start or how the process works? Look no further. In this expert-written guide, you will learn everything you need to know about the home loan process.
Our guide will show you the exact process to get your mortgage approved and how long you can expect to wait for the approval.
In fact, we’ve used this exact process to help over 1,900 people get their home loans unconditionally approved.
So, if you’re looking for everything you need to know about the home loan process, then you’ll love this guide.
Let’s dive right in.
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CHAPTER 1: Speaking With Your Mortgage Broker
1 Hour
Let’s face it; sometimes it feels like there just aren’t enough hours in the day— trying to balance work, exercise, catch-ups with friends and families, planning your next holiday, paying bills and more. Luckily, you can relieve some of the pressure through a simple chat with your mortgage broker. A mortgage broker like Hunter Galloway, with access to over 30 lenders, can help you save hours and find the right home loan option easily. The best part? The service is free to you because we are paid by the bank.
The Initial Conversation
The initial conversation with your broker will go a little something like this:
First, discuss what you want to achieve and why exactly you want a loan. Are you looking to find a new home, refinance or upgrade? Understanding your motivations will help the mortgage broker tailor their advice to your specific needs.
Next, determine your eligibility and deposit and how much you can borrow. Nothing is as terrible as finding your dream home, putting in an offer and then having your home loan declined. Or not having enough deposit for the house you want to buy. This eligibility assessment is one of the most important steps of the home loan process.
Eligibility Assessment
How does the eligibility assessment work? A meeting will be arranged with you and your broker to figure out if you meet the eligibility criteria.
The broker will assess your eligibility by looking at your current financial situation. If you meet the criteria, then it’s time to fill out the application form and submit it with your bank statement, pay slips and ID. You are required to provide the following list of documents during the application process:
- ID documents (passport, driver’s license)
- Payslips (salary statements)
- Bank account statements (day-to-day account)
- Expenses and liabilities accounts (credit card or loan statements)
- Contract of sale (if you’ve found something to buy)
Read More: 21 [easy] Tips to Find the Best Mortgage Broker in Australia
CHAPTER 2: Preparing Your Application
1-3 days
Now that you’ve met with your mortgage broker, it’s time to put the actions discussed into motion. That includes putting together your home loan application and getting it ready to submit to the bank. From here, a preliminary assessment will be completed. So, let’s take a look at exactly what’s involved.
What's in a Preliminary Assessment?
A preliminary assessment (also called a pre-assessment) is where we will take time to go through your payslips, bank statements and other information provided in detail to make sure everything will be acceptable to the bank. There are really two roles for pre-assessment. One is the bank’s role, and the other is your broker’s role.
Before submitting your application to the bank, your broker will analyse things like your payslips, your bank statements, and your credit file and neatly package them. They’ll make notes on things that are a little bit outside the box so that when it comes to the pre-assessment, which the bank does, they really have to do nothing there, and they can complete their approval quickly and seamlessly.
After your Mortgage Broker figures out everything, they will try to find a lender who can offer the best loan packages at the lowest interest rate. This gives you an option to choose the right home loan package for you.
Choosing The Product
After selecting your desired product, the next step in the home loan application process is to provide you with the final set of documents (like the bank application form) and get you to sign a privacy form. Once the broker collects all the documents, they are emailed to the lender.
What can cause delays at this stage?
During the assessment phase, there are really two things that can happen here. The first is you get the green light, and you go on to the next phase. The other is that the assessor asks for more information. We call it a missing information request. Your broker will have to supply the information, which goes back into the assessment queue, ultimately slowing the process down. A great mortgage broker will essentially ensure that at their pre-submission, everything the bank wants is given to them upfront, so there is no further request for more information.
At Hunter Galloway, we believe ‘slow is fast’, so we take more time upfront to double-check your paperwork to ensure your loan is approved the first time by the bank.
If you want our team of Award Winning Mortgage Brokers to see how we can help, get in touch or give us a call on 1300 088 065.
Read More: 10 [simple] Tips for Choosing the Best Home Loan in Brisbane
CHAPTER 3: Conditional Approval "Loan Approved In Principle.
3-5 days
Put your feet up because once you’ve reached the conditional approval stage, it’s time to sit back and wait for the bank to assess your home loan application. This process takes between 3 to 5 days for your home loan application to progress through the queue, be picked up by a credit officer and then receive conditional approval. But what’s more important to know is… It will take longer if the information is missing, so this is why we make sure we have all the information upfront. So, let’s take a look at the different approvals and stages of this.
Pre-Approval And Conditional Approval
Let’s first get one thing straight.
Pre-approval is not the same as an unconditional approval (which we cover in Chapter #5).
So once the lender receives your application and supporting documents, they’ll evaluate it to confirm if it aligns with their policy.
The approval of an application depends on certain conditions; for example, the bank can approve your loan subject to you finding a suitable property or even subject to a satisfactory property valuation (Step #4).
Our Mortgage Brokers can also help you get a pre-approval on your loan if you haven’t found the right property yet.
How long does pre-approval take?
Once your Mortgage Broker has received your application, signed application forms and submitted everything to the lender, it can take three to five days to complete your pre-approval.
If there is missing information, it can take longer.
What can cause delays at this stage:
- Banks with slow turnaround times.
- Lenders who have special offers and higher than normal home loan volume. Never before has the bank seen so much volume, and there’s been a huge surge. A lot of lenders are falling behind because they simply can’t keep up with the volumes.
- Missing Supporting Documents. As we mentioned above. Missing documents will cause the bank to return your application, and once you have submitted the missing documents, you will have to rejoin the queue.
- Incorrectly completed forms
At Hunter Galloway, we have ‘Priority Status’ with a large number of banks on our panel; this provides our customers with faster approval times and access to specials that aren’t available to the public.
Contact us for a FREE assessment today, or call us on 1300 088 065 to see how we can help.
CHAPTER 4: Arranging a Property Valuation
1-2 days
Once you’ve found your dream property and prepared the contract of sale, it’s time to get a final valuation on the property. The valuers work on behalf of the bank. But, they are not employed directly by the bank. This means they can complete a valuation independent from the bank. So, the valuer works independently.
They will need to physically visit the property, and one thing that can cause delays at this stage is if your property has tenants living there.
The question is:
How does getting a property valuation work?
Well, that’s what this chapter is all about.
How long does a property valuation take?
Ordinarily, a valuation can take between three and seven days to complete. So if you have a good bank or broker what they’ll actually do is they’ll order you a customer ordered valuation with their pre-submission check. This will essentially allow the process to be sped up so that when it comes time, the assessor has everything to complete their approval. It can take between one to two days to complete.
If there are tenants in the property, In Queensland, you need to give your tenants 24 hours’ notice before getting entry to a rental property. Keep this in mind to make sure your home loan application progresses quickly.
Electronic Valuations
A positive change that has come about in the past year or so is that if you have more than a 20% deposit, a lot of the banks do not require you to get a physical property valuation.
Banks like CBA, NAB, and ANZ will use electronic valuation services like RP Data to confirm your property’s value. This can speed your home loan approval up by 1-2 days!
Winning.
What Can Cause Delays At This Stage:
- Slow property managers, and tenants delaying valuers access to the property.
- Contracts of sale that are incomplete or missing information.
- Property valuation coming in at a reduced value
- Not ordering a valuation upfront
At Hunter Galloway, we have access to upfront valuations through the majority of our lenders, so we know if there are going to be problems with the bank’s valuation before submitting your loan application.
If you have had issues with your bank valuation, call our team to discuss your options on 1300 088 065 or get in touch now.
Read More: How to Challenge a Bank Valuation
CHAPTER 5: Unconditional Approval… Also Called Formal Approval
3-5 days
When it comes to a final home loan approval, it’s usually called one of two things:
Option #1: Unconditional Approval.
Option #2: Formal Approval.
The good news is that they both mean the same thing…
So why do you need formal approval, and how long does it take?
Let’s dive right in.
What is Unconditional Approval?
Lenders give unconditional approval once you have met all of the conditions and are satisfied that you qualify for it. In other words, at this point, your loan is approved without any further conditions.
If you have a loan of over 80 per cent LVR, you will have to pay the lender’s mortgage insurance and also need to get your loan approved by them. However, if the mortgage insurer has approved your application, you think that the loan approval letter will just be issued. Well, it’s not that simple; it will typically go through the bank’s final assessment and back to the assessor so that they can pick up your file and then issue the approval letter. And this is where delays can happen.
Make sure you have unconditional approval before satisfying the finance clause on your contract.
How long does loan approval take?
Formal unconditional approval can only be done once the bank has verified all of your outstanding information, including the property valuation.
It can take between one day and one week to complete.
What can cause delays at this stage:
- Home Loan being declined by the lender and needing to be sent to a new bank.
- Lenders Mortgage Insurers not accepting the property as suitable security.
At Hunter Galloway, we have access to 30+ lenders and banks across Australia; our Mortgage Brokers have a dedicated team of Credit Analysts to ensure we can find the right deal for you.
If you have had your home loan declined, give us a call at 1300 088 065 to discuss your options or book a free assessment now.
Read More: Loan declined after Pre-approval | 26 Techniques to get Unconditional Approval
CHAPTER 6: Sign Your Loan Documents
1-3 days
Here’s the deal:
If you want to get to settlement, you need to sign a few more documents. This is essentially where the bank will complete their loan contracts and either issue them via post, email them to your broker so they can print them or send you via DocuSign.
The question is:
WHERE DO YOU SIGN?
Let’s take a look at what’s involved in one of the final steps.
Documents to sign in the home loan process
After your loan has been unconditionally approved the bank will send your loan documents to you to sign.
These documents can be a little complicated and include Loan Contracts, Mortgage Documents, Direct Debit forms, and a bunch of other stuff.
The good news is that your Mortgage Broker will arrange a time to catch up and help you sign them. A great bank or broker will step you through these documents so that you fully understand all the details, including the interest rate, loan amount and fees and charges.
(This also makes sure no signatures are missed and your settlement isn’t delayed)
You’ll post the signed loan documents back to the bank, and once they’ve received them, they’ll complete their certification. Certification is essentially double-checking you’ve signed in the right places and that you’ve not modified any of the documents in any way, shape, or form. Since they’re legal documents you can’t cross anything out or amend anything because it essentially renders them void.
What can cause delays at this stage:
- Loan documents incomplete
- Mortgage contracts incorrectly signed
At Hunter Galloway, we catch up with all our clients to sign the loan documents. The majority of banks we work with allow us to print the loan documents in our office so we can check nothing is missing before sending them back to the bank. Call us on 1300 088 065 or enquire online to see how we can help you to settlement.
Read More: 5 Simple Steps to Settlement
CHAPTER 7: Settlement!
5-15 days
This step is the most exciting part of all.
…And if you are buying a home this is possibly the busiest part of the entire home loan process.
So here’s what you need to know to prepare.
Loan documents are received by the bank.
After your loan documents have been received by the bank, they will complete their certification to confirm everything has been signed correctly and go ahead with the booking settlement.
In other words, The bank dots the I’s and crosses the T’s. When you are buying a home, the bank will then get in touch with your solicitor, or conveyancer to let them know everything is good to go.
Your solicitor or conveyancer will then arrange the settlement date.
On the other hand, if you are refinancing a home, your new bank will get in touch with the old bank to arrange a settlement date.
When you are buying a new home
If you are buying a home, it is worth checking out our pre-settlement checklist.
During this busy time, it’s easy to forget to set up your mail redirection and get your internet changed or power connected before your actual settlement date!
(Yes, we’ve seen it happen)
Once everything is done…
You can sit back and wait for settlement.
The bank or your solicitor will take over from here so you can chill and wait to hear from your Mortgage Broker who will confirm the exact date of settlement.
The settlement will go through when your loan has been drawn down, and your Mortgage Broker will let you know as soon as the lender tells us.
Congratulations you’ve made it through the entire home loan process!
Read More: After Settlement, 7 Ways of Creating Home Equity [Faster]
Chapter 8: Ongoing Support.
As soon as your loan settles, many mortgage brokers will just dump you and move on to the next client. At Hunter Galloway we are in it with you for the long haul, which is why we believe in ongoing support.
Two weeks after settlement
Once your loan has settled, and all set up we’ll keep in touch to make sure your automatic loan repayments (also known as direct debits) are correct.
At this stage, we’ll also find out if you have any dramas with internet banking or offset accounts and make sure they are working as they should.
Annual review
At Hunter Galloway, we keep in touch with our clients each year on the anniversary of your settlement to check that you haven’t run into any dramas, review your loan, and make sure everything is fine.
Ongoing Support
At Hunter Galloway, we provide ongoing support to our customers long after the settlement of a loan.
We will monitor the value of your property, discuss any issues you might have had with the lender, provide guidance to fix the loan rate (or switch to a different home loan product), review your interest rates, and help change the repayment frequency.
Read More: Pay Off Your 30-year Home Loan 6 Years Faster [10 Easy Tips]
CHAPTER 9: Move Into Your New Home
You finally made it, moving day!
Follow our checklists on preparing for moving day so that it can be a seamless transition. Remember, if you have pets or children, organise somewhere for them to go to make the move easier.
Remember to start packing days in advance since you may have to do some decluttering. Change your address for mail and any subscription services you may have.
DON’T FORGET to contact utility providers (electricity, water, gas, internet) to schedule disconnections at your old home and connections at your new one.
Bonus: How Long Does A Home Loan Application Take?
After your Mortgage Broker has received your application and submitted it to a lender, it can take between one hour to one week for the bank to complete your pre-approval. Your property valuation can take one day to one week, as well as the unconditional approval. So, in total, from initial pre-approval to settlement, the entire home loan application process in Australia can range from approximately 3 to 8 weeks or more, depending on individual circumstances and lender efficiency. Being organised and responsive during each stage can help speed up the process.
BONUS: How To Build A House Checklist
Building a home can be a stressful process, so make sure you don’t miss anything, from checking your builder to making sure nothing is missed on the plans.
Download: Build a House Checklist
Ready to take the next step toward buying? We’re happy to help. Schedule a call today with a Home Loan Expert from Hunter Galloway, the home of home buyers.
Speak To Your Mortgage Broker Team Today
If you are looking for the best home loan or wanting to buy a home or refinance, speak with one of our experienced mortgage brokers to walk through the next steps with you.
Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
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