Applying for a home loan: A step-by-step process

LendingFinance

19 July 2021

Applying for a home loan can feel daunting if you’re unfamiliar with the process. But with a little preparation and support from the experts, the process can be smooth and straight forward.

Here’s a step-by-step guide of the most common steps you’ll go through when applying for a home loan.

Step 1: Appointment

The first contact you will likely have in the home loan process is with a mortgage broker or lender, who will seek to better understand your financial goals and requirements for a loan.

Prior to your initial appointment, your mortgage broker or lender will send you a checklist of documentation they require to assess the market for the most suitable loan for you. This will help them calculate your borrowing capacity, work out repayments and answer any questions you may have during your appointment.

First appointments can be made in many ways these days. In an office, at a mutually convenient location, or even virtually through videoconferencing software like Teams or Zoom.

Step 2: Preliminary assessment

Once your broker or lender has assessed your financial position based on the information supplied, they can help you choose the most suitable loan for your circumstances. They’ll also prepare your compliance and application forms to review and sign before lodging the home loan application on your behalf.

Step 3: Submission

Once signed forms have been returned, the application is ready for submission to the lender for credit assessment and a decision. The service level agreements vary between lenders, so it is important your broker be transparent on what this is to help manage expectations and keep you informed as you progress through the application journey.

Step 4: Approval

If your application has been successful, the chosen lender will issue a ‘Conditional Approval’ while they organise a bank valuation and advise of any outstanding conditions that need to be met before final approval is issued. During this stage, the lender will also conduct a credit check. When all conditions have been satisfied, your loan will reach the final stage of being ‘Unconditionally Approved’.

Step 5: Loan offer

At this stage of the process, it’s time to pop the bubbly because your loan has been formally approved. All the hard leg work has been done and the bank is happy to lend you the money you need.

It’s a good idea to book an appointment with your broker or lender at this stage. The paperwork can feel overwhelming, as there is a fair bit of information to go through and documents to execute correctly and be witnessed by an authorised person.

Your broker or lender can go through the documents with you, explaining and assisting with bank jargon or any new or refreshed queries that come up. They can also help ensure the loan documents are completed correctly, so that you’re not asked to re-sign, which could delay settlement.

By this stage, it’s also usually a condition of your home loan that building insurance is in place, with the lender noted as the interested mortgagee/party.

Step 6: Settlement

As settlement is the official process of transferring property ownership (if purchasing a property) or registration of new mortgage (if refinancing from one lender to another), this is the final leg of the process!

Once settlement has been arranged (booked), your broker or lender will let you know of completion and ask that you check your accounts online to ensure all accounts are in order.

Step 7: Home loan completion

Now that your loan has settled, your broker or lender should check in with you after four to six weeks. By this time, you probably would have made your first repayment and received any further material from the lender, such as debit cards or credit cards if they were part of your package.

A good broker will also conduct regular home loan checks to help ensure your loan remains the most appropriate one for you. If you’d like to find out more, get in touch with the Findex Lending and Finance team.

This article was originally published on 12 July 2021 forStay-at-Home Mum

Author: Natalie Stojanovska

Natalie commenced her career in financial services with Centric Wealth (Lending) some 6 years ago. During this time, she has developed a detailed understanding of the lending process in both her previous roles of Lending Administration Officer and Client Services Coordinator. Her depth of knowledge is exceptional given her exposure to complex tec...