The loan application process can be a long and complicated process.
With so many steps involved, people often don’t know where to start when applying for a mortgage.
This is the first contact you’ll have with your mortgage broker.
We use this stage to discuss your situation, your needs and objectives behind getting a home loan.
At the end of this discussion, we’ll determine if you’re likely to be eligible for a loan.
It’s also your opportunity to agree to use us as your broker.
Returning your application and documents
Once you’ve agreed to use us as your broker, we’ll ask you to compete our paper or online application.
We’ll also require supporting documents such as your ID, pay slips and bank statements.
By giving us all supporting documents in one go, it allows us to give you a quick and accurate assessment.
After we have your application and supporting documents, we’re able to complete a preliminary assessment of your situation.
The preliminary assessment is a very detailed process where we identify any possible problems from a lending point of view.
We’ll also calculate your borrowing capacity.
Our brokers will then assess which lenders can assist and compare the most suitable loans at the lowest interest rates.
After the preliminary assessment, we present two or three recommended loans to you so you can pick which one your prefer.
Submit to a lender
When you’ve chosen the most suitable loan for you, we’ll then prepare to submit your application to the lender.
We’ll ask you to provide any final documents and to sign the lender’s privacy form.
While we wait for these documents, we prepare your application and upload it into the lender’s system.
We highlight the strengths of your application and present it so it suits the way that the particular lender will assess the loan.
Once we have everything we need, then we click submit on the lender’s system and email your supporting documents to the lender.
Conditional Approval/ Pre-Approval
Once the lender has all your application and supporting documents, the lender assesses your application and confirms that you meet their policy.
The lenders issue an approval subject to particular conditions.
For example, a condition could be that the property being used as security is acceptable to the bank.
If you haven’t found a property yet, we can get your loan pre-approved by a lender.
That mean that as long as the property meets the lenders guidelines, they are likely to approve the loan.
A pre-approval is valid for 90 days with most lenders.
They can be extended if need be by providing up to date pay slips and other documents.
Some people buy a property before they have a pre-approval.
They sign the contract to buy a property and then they organise their loan.
This can be risky: if you can’t get a loan then you may lose your deposit on the property.
Once you have chosen your desired property, a valuer will make an appointment to inspect the property.
The bank doesn’t employ valuers, they are separate companies.
As a result, the timeline can vary.
In some cases, tenants can delay the valuer from gaining access to the property.
For very low risk applications, a valuer may not be required.
We can order upfront valuations with many of our lenders, which enables the bank to skip the first two steps and go straight to formal approval.
Unconditional Approval/Formal Approval
Unconditional Approval, also known as formal approval, is when the lender has everything they need and can confirm that they are willing to lend you the money.
They will issue a letter confirming their approval.
At this stage, you can relax.
Sometimes, there’s some going back and forth asking for additional documents before the bank can finalise approval.
This is normal for complex applications or where you haven’t provided everything that the lender needs up front.
If you’re borrowing over 80% LVR then you may need lenders mortgage insurance approval as well.
In some cases, this will mean that your application will take longer before a final approval.
You should get formal approval before the end of the cooling off period.
Loan Offer Issued
Once the loan has been formally approved, the lender will send you a loan contract for you to sign to accept their loan.
You can go through this contract with your solicitor if you’d like to receive independent legal advice.
This is optional for most loans.
Once you’ve signed the contract, return it to the lender with any requirements that they need to settle the loan.
Once the lender has certified that all of your documents are in order, they can then advance the loan funds.
For a purchase, they will call your solicitor or conveyancer and let them know that the funds are available.
Your conveyancer will book in a settlement time and date with the lender.
For a refinance loan, your new lender will arrange with your current lender to repay their loan and take possession of your certificate of title.
They will book in a time to meet and sort this out automatically.
Settlement has occurred when the loan is advanced.
We’ll notify you as soon as the lender informs us.
After loan is set up
After your loan is set up, we’ll call you a couple of times after the settlement to make sure that you understand the loan and know how to make repayments.
We’ll also ask for a copy of the settlement letter to make sure that the lender hasn’t overcharged you.
We’ll call a customer annually on the anniversary of their settlement to check that they haven’t had any problems and review their home loan.
We provide ongoing help with our customers, long after they have settled their loan.
During these opportunities, we’re able to help customers apply for a new loan by:
- Reviewing their interest rate.
- Switching loan products.
- Determining whether they should fix their loan rate or not.
- Discussing any hardship or potential problems with their loan. This is to make sure that you are getting the most out of your loan.
How long does a loan application take?
The time that a loan application can take will vary significantly as some borrows will have more complex applications than others.
Lenders who offer a lower interest rate are often slower as they receive more applications.
Other lenders are completely incompetent!
We’ll warn you if any of the lenders we’re recommending are known to have poor service levels.
To give you some idea, it usually takes a customer 48 hours to send their documents to us.
It will then take 24 hours for us to confirm our recommendation.
When the lender receives the loan, it can take anywhere from four hours to two weeks for them to complete conditional approval.
The valuation can take from two days to one week.
Formal approval can take from one day to one week.
The best way to find out is to call us to confirm the time required.
As a general rule, if you’re buying a property allow a two-week cooling off period or finance clause to give us ample time to obtain an approval.
What documents will I need?
Throughout the application process, you’ll be notified of a list of documents that you’ll be required to supply.
These documents will include the following:
- Payslips: These must be recent and when multiple payslips are required, they must be consecutive. They should clearly show employer name, your name and salary.
- Account statements: These must show account numbers, balance, limit and transactions for the period specified.
- Liabilities and Expenses documentation: Includes statements for car loans, other mortgages or credit cards.
- Asset documents: These documents can include banks statements or rates notices to show your savings record.
- Contract of Sale: Send through the details of the property you wish to buy and the signature pages. There’s no need to send through the entire contract.
- Certified Identity Documents: This must show certifiers details, document number and date of issue. If you’re a non-resident or Australian expat then Australian consular staff are usually the best option. Check the lenders requirements closely.
- If your name has changed due to marriage or divorce, please provide a marriage certificate or other verifications. Statutory declarations will suffice.
Who’s involved in the application process?
There are many parties involved in the application process, including:
- Building and pest inspectors.
- Solicitors or conveyancers.
- Real estate agents.
- LMI providers and insurers.
- Your mortgage broker.
The first step
To begin the application process and get your home loan approved, give us a call on 1300 889 743 or enquire online.
One of our mortgage brokers will give you a call and get the loan application process started.