Here, we explain how to get formally approved. Whether you’re buying your first or second home, investing in a property or refinancing your home loan, we’re here to help. As your mortgage broker, we can support you through the process and do the legwork for you.
Formal home loan approval requirements
Getting pre-approved (also known as conditional approval) is usually the first step before starting the property search. This will require you to meet the lender’s borrowing criteria and provide various types of documentation, which may include:
Proof of income and savings
Assets and liabilities
Step 1: Gather all necessary documentation & submit your loan application
Unconditional approval (or formal approval) happens once you have met all of the lender’s conditions and they are satisfied that you qualify for the loan. There’s usually a stipulation in your contract saying ‘subject to finance’ when you make an offer on a property, so that you can apply for formal approval.
As your mortgage broker, we’ll help you gather all of the necessary documentation and submit your application. The lender will then arrange a valuation and assess the property. The timeframe for reviewing and processing your application will depend on your situation, the settlement period, as well as the lender’s service levels and seasonal peak periods such as EOFY and Christmas.
Step 2: Review the paperwork
If approved, you’ll receive a confirmation letter and final loan documents to review, sign and return to the lender (it is recommended to get your solicitor to review these). Many lenders now offer the convenience of digital document signing.
Step 3: Talk to your broker about insurance
You may be required to take out building insurance. If you’re an investor, you may also need landlord insurance. Speak to your broker about the right insurance for your needs.
Step 4: Do a final inspection
After this, you should arrange a final inspection of the property before settlement to ensure everything in the contract of sale is in working order.
Step 5: Settlement
Your settlement agent will meet with the lender and the seller’s representatives to exchange documents and the balance of the purchase price will be paid to the seller.
Step 6: Enjoy your property
Collect the keys and do a happy dance! The property is now yours.
Buying a property is a big deal, and if it’s your first time, you might be hearing a lot of unfamiliar phrases and terminology. Here’s a breakdown of some common terms.