The Home Loan Process Explained

Enquiry stage

There is an extensive range of home loans on offer. Your best bet is to arrange a meeting with a reputable mortgage broker. They will give you an indication of how much you can borrow, so you’ll know what your home loan budget is. They can also arrange a pre-approval of your loan if you have the information they need.

Property Search and Application

Search the real estate pages, jog or walk in a suburb you like, when you have found a property you’re interested in, sign a contract subject to “personally suitable finance“. Enquire about some home and contents insurance, so you know how much you will be up for. Contact your broker again and apply for a home loan, or home mortgage. When applying, you will require some financial documents including proof identity, income, savings history and proof of deposit. Your broker or lender will be able to provide you with a comprehensive list of information required. The broker will take your application, attach a letter of their own explaining your needs, situation, their recommendations and submit it to a lender.

Conditional approval

Usually once your application has been reviewed by your lenders credit department, you will receive a conditional approval letter. This letter will detail your loan amount subject to a property valuation and other conditions which may include Lenders Mortgage Insurance. At this time you should engage a conveyancer. Your broker will be able to put you onto a good one.

Property valuation

Your lender will engage an accredited property valuer who will perform an accurate valuation on your proposed property purchase to satisfy themselves they should use it as collateral and to ensure you are getting what you are paying for.

Formal approval

After reviewing your application, carrying out credit checks, assessing the valuation, confirming your income and deposit, your lender will send a letter confirming your formal loan approval to your Mortgage Broker. They should call you with the good news. A few days latter you will receive a loan offer/mortgage document detailing the amount, fees and conditions of your loan. These documents should be read carefully before signing. Lenders make mistakes. Get your Mortgage Broker to explain things you don’t immediately understand. Return the documents quickly after signing. You do not want to delay settlement, your lender will appreciate your quick action.

Loan settlement

This normally takes 4 – 8 weeks to get to this point. Your conveyancer should be in control of the situation here, as they will act as the go between you, the lender and the seller. If you need to settle quickly, get your Mortgage Broker to put some heat on your lender.

Settlement letter

After settlement of your loan, you will receive a letter from your conveyancer and your lender detailing your settlement figures. It is a good idea to make an appointment with your Mortgage Broker at this point and review the final details of the loan, including payments and exit fees. Keep in close contact with your Mortgage Broker, use their expertise moving forward. They will have plenty of ideas and tools like a mortgage statement checker to help you. They will also be there to advise if times get tough.

Hope this helps. Start looking for a good Mortgage Broker today, make them a friend. Their lively hood depends on your happiness, so they will generally look after you better than a Bank or Mobile Institutional Lender.

For best emergency loan rates. Please read the bank’s eligibility criteria carefully before proceeding with your mortgage process. Prepare all credentials, address, work and other details. Do not forge any documents, as this will only cause serious problems.. Do not skip any steps in the assessment and verification process.

Written by 

John Willis is a graduate of Developmental Communication from the University of the Philippines. He works for as the editorial manager of the team.