Today we are going to show you, step-by-step, the EXACT home loan process and how long it takes to get your mortgage approved. We’ve used this exact process to help over 1300 people in the past 12 months get their home loan unconditionally approved.
Here is a list of the steps:
- Step #1: Chat with a Mortgage Broker
- Step #2: Time to prepare your application
- Step #3: Conditional approval “loan approved in principle”
- Step #4: We will arrange a Property Valuation
- Step #5: Unconditional approval… Also called formal approval
- Step #6: Sign your loan documents
- Step #7: Settlement!
- Step #8: Two weeks after settlement
- Step #9: Annual review
- Bonus: How long does a home loan application take?
- Bonus: How has Covid changed the way banks approve loans?
- Bonus: How can you make sure your loan gets approved?
- Speak to your Mortgage Broker team today
Let’s dive in.
Step #1: Chat with a Mortgage Broker
Expected duration: 1 hour
First contact
We’ll catch up with you to understand your needs and find the home loan that best suits you.
Eligibility Assessment
- ✅ 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)
Step #2: Time to prepare your application
Expected duration: 1-3 days
Preliminary Assessment
Your Mortgage Broker will run through their panel of lenders, at Hunter Galloway we have access to over 30 banks and lenders to give you more choice and options.
Choosing the Product
What can cause delays at this stage:
- ⛔️ Additional supporting documents required
- ⛔️ Missing paperwork, or delays in returning forms
Step #3: Conditional approval “loan approved in principle”
Expected duration: 3-5 days
Pre-approval and Conditional Approval
A pre-approval is usually approved subject to lots of conditions which can be sorted out later once you find a property.
How long does pre-approval take?
What can cause delays at this stage:
- ⛔️ Banks with slow turnaround times
- ⛔️ Lenders who have special offers and higher than normal home loan volume
- ⛔️ Missing Supporting Documents
- ⛔️ Incorrectly completed forms
Step #4: We will arrange a Property Valuation
Expected duration: 1-2 days
This is an example of a bank valuation, completed by an independent valuer.
How long does a property valuation take?
Electronic Valuations
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
Step #5: Unconditional approval… Also called formal approval
Expected duration: 3-5 days
A formally approved loan (unconditional approval) is not subject to any further approval conditions.
How long does loan approval take?
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
Check to see if you are eligible for a home loan
Step #6: Sign your loan documents
Expected duration: 1-3 days
What can cause delays at this stage:
- ⛔️ Loan documents incomplete
- ⛔️ Mortgage contracts incorrectly signed
Step #7: Settlement!
Expected duration: 5-15 days
Loan documents are received by the bank
When you are buying a new home
Once all that is done…
Step #8: Two weeks after settlement
Step #9: Annual review
Ongoing Support
Bonus: How long does a home loan application take?
Would you like to learn about your situation?
Bonus: How has COVID changed the way banks approve loans?
- Working in specific industries.
- How you earn your income.
- If you are a ‘casual’ worker.
- If you are looking to buy land and build.
- Guarantor loans.
- Your existing account conduct.
- The banks are asking more questions:
- How are you going to meet your lending obligations?
- How’s your situation changed since covid?
- How has covid affected your industry?
- How has it affected your hours and if it has affected your hours?
- What is gonna be the impact moving forward?
Bonus: How can you make sure your loan gets approved?
- Income and employment.
- Job security.
- If you are a single applicant, try and increase your borrowing power as much as possible.
Bonus: Mistakes nearly all first home buyers make.
- Thinking you need a 20% deposit. With the prices of houses right now, raising a 20% deposit can seem impossible, and most people just give up. However, all you need is to raise between 8-10% of the value, and you may be able to get a loan. But these low-deposit loans usually come with Lenders Mortgage Insurance.
- Waiting (forever) to get genuine savings. Usually, banks want to see you hold at least 5% of the property’s purchase price in one of your bank accounts for at least a 3-month period – that’s genuine savings. The good news is some banks consider your rental history as genuine savings. Others even consider 5% of your deposit as proof of genuine savings.
- Underestimating the cost of buying a house. In addition to your mortgage, there are about 10 other costs of buying a home. These costs can get to the thousands! For example, Stamp Duty can cost tens of thousands. Your mortgage broker can help you budget for these costs.
- Not knowing who the real estate agent is working for. While real estate agents are generally friendly, remember that their job is to get the seller the highest price possible. They are not there to make sure you get a bargain! So tread carefully when dealing with real estate agents.
Speak to your Mortgage Broker team today
The Hunter Galloway Mortgage Broker Brisbane team is here to help. We have a team of home loan experts.