Are you planning to purchase your first home or investment property?
It’s an exciting time and nothing compares to the feeling of holding the keys to your very own property in your hand.
If you’re new to buying property, here’s how the home loan application process works.
When it comes to buying a home or investment property, the first step is to get a clear picture of your borrowing power and budget.
How much can you aford to spend on the property? What repayments can you reasonably cover?
Having a budget in mind will help you narrow down your property search and avoid overspending. Touch base with us for some preliminary insight into your borrowing capacity.
Next, it’s time to see what loans are available and get a feel for the diferent lenders. The easiest way to do this is to have us compare the market for you.
We’ll get to know your financial situation and goals before recommending a suitable home loan.
Once you’ve decided on a lender, we’ll get the ball rolling with pre-approval on your finance.
This is when a lender agrees, in principle, to lend you a certain amount of money. It’s also referred to as ‘approval in principle’ or ‘conditional approval’.
You’ll still need full approval down the track, but getting pre-approved allows you to bid or make an ofer on a property with confidence.
You’ll need to supply a range of documentation to support your pre-approval application.
Requirements can difer from lender to lender, but generally speaking, they’ll typically want to check your:
We can walk you through the paperwork and ensure nothing is missed.
If the lender decides you’re a suitable candidate for a loan, they will issue you with a pre-approval letter.
Remember that pre-approvals are not a definite guarantee that you’ll get a home loan. You’ll still need to meet the conditions stipulated by the lender.
Pre-approval shouldn’t cost anything. There’s also no obligation to take out a full home loan with that lender.
Typically, pre-approvals are valid for three months.
After pre-approval comes the fun part – house hunting. Once the right property comes along, it’s time to make an offer.
You’ll need to decide at this point whether to stick with the lender that gave you pre-approval or shop around for another home loan.
The final step is to complete the full home loan application for unconditional approval.
If you decide to go through the same lender that gave you pre-approval, most of the documentation will probably have already been completed. We’ll walk you through any other requirements needed.
As part of your application, your lender will likely get an independent valuation of the property. This helps them determine the risk involved in lending you the money.
If all goes well and your mortgage application is approved, the lender will send you an unconditional loan approval letter. It’s a good idea to have your solicitor or conveyancer review everything to make sure it’s in order before you sign the loan documents.
Finally, it’s time for settlement. At this point, the lender will certify that your documents are in order and advance the home loan.
Your legal and financial representatives will meet with the seller’s representatives to swap documents and lodge the transfer of title. Stamp duty is usually paid at the same time as settlement.
Then the property is all yours!
As a first-time buyer, getting your head around the home loan application process can be daunting. That’s where we come in.
Mortgage brokers may take the stress out of applying for a home loan. We have access to a wide range of lenders and understand which home loans might work for your specific financial circumstances and goals.
Let’s chat about your property purchasing plans. Please contact us for assistance.
The material on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this website is General Advice and does not take into account any person's particular investment objectives, financial situation and particular needs. Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this website are provided for illustrative purposes only. Although every effort has been made to verify the accuracy of the information contained on this website, Infocus, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.