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APPLICATION PROCESS
The loan application process can be long and complicated.
With so many steps involved, people often don’t know where to start when applying for a Loan.
Initial conversation
Home LoaNS
This is the first contact you will have with your mortgage broker. We use this stage to discuss your situation, your needs and objectives behind getting a home loan.
At the end of this discussion, we will determine if you’re eligibility for a home loan. It’s also your opportunity to agree to use us as your broker.
Returning your application and documents
Once you have agreed to use us as your broker, we will ask you to complete our Fact find.
We will also require supporting documents such as your ID, pay slips and bank statements.
By giving us all supporting documents in one go, it allows us to give you a quick and accurate assessment.
Preliminary assessment
After we have your application and supporting documents, we’re able to complete a preliminary assessment of your situation.
The preliminary assessment is a very detailed process where we identify any possible problems from a lending point of view.
We will also calculate your borrowing capacity or borrowing power. Our brokers will then assess which lenders can assist and compare the most suitable loans at the lowest interest rates.
After the preliminary assessment, the broker will present two or three loan recommendations for you to choose from.
Submit to a lender
Once you have chosen the most suitable loan for you, we’ll then prepare to submit your application to the lender.
We will ask you to provide any final documents and to sign the lender’s privacy form.
While we wait for these documents, we prepare your application and upload it into the lender’s system or application portal.
We highlight the strengths of your application and present it so it suits the way that the particular lender will assess the loan.
Once we have everything we need, we click submit on the lender’s system and email your supporting documents to the lender.
Loan application
Conditional approval or pre-approval
Home loan pre-approval, also known as conditional approval or in-principle approval, is not a full approval.
At this stage, you have met most of the bank’s lending policies subject to a few conditions.
Typically, it means that you are yet to find a property which means your home loan is approved subject to a property valuation.
As long as the property meets the lender’s guidelines, they are likely to approve your home loan application. You can read more about property types that are acceptable to lenders and others that can be difficult to get approved.
The good news is that a pre-approval lasts about 3 months, which is usually enough time to find a suitable property.
Usually, you can extend your pre-approval if needed by providing a new set of payslips.
We often receive enquiries from customers who sign the Contract of Sale and pay their deposit before getting pre-approved.
This can be risky! If you can’t get formal approval, you risk losing your deposit.
Property valuation
Once you have chosen your desired property, a valuer will make an appointment to inspect the property.
The bank does not employ property valuers – they are separate companies which means their valuations are independent.
It also means the timelines for completing a valuation can vary.
In some cases, tenants can delay the valuer from gaining access to the property.
For very low risk applications, a valuer may not be required.
We can order upfront valuations with many of our lenders, which enables the bank to skip the first two steps and go straight to formal approval.
Unconditional approval or formal approval
Unconditional approval, also known as formal approval, is when the lender has everything they need and can confirm that they are willing to approve your loan.
They will issue a letter confirming their approval so, at this stage, you can relax.
There may sometimes be some back and forth with the bank asking for additional documents before they can finalise approval.
This is normal for complex applications or where you haven’t provided everything that the lender needs upfront.
If you’re borrowing over 80% of the property value, you may need Lenders Mortgage Insurance (LMI) approval as well.
In some cases, this will mean that your application will take longer to reach unconditional approval.
Loan offer issued
Once the loan has been formally approved, the lender will send you a loan contract for you to sign to accept their offer.
You can go through this contract with your solicitor if you’d like to receive independent legal advice.
Once you’ve signed the contract, return it to the lender with any requirements that they need to settle the loan.
Do this as soon as possible to avoid delays at settlement!
Settlement
Once the lender has certified that all of your documents are in order, they can then advance the loan funds.
For a purchase, they will call your solicitor or conveyancer and let them know that the funds are available.
Your conveyancer will book in a settlement time and date with the lender.
For a home loan refinance, your new lender will arrange with your current lender to repay their loan and take possession of your mortgage title.
They will book in a time to meet and sort this out automatically.
Settlement has occurred when the loan is advanced and your bank or broker will notify you as soon as the lender informs us.
Asset Finance
Application
This process takes about 10 minutes on the phone or face to face if you prefer. Our team will ask for your personal details such as Full name, address, residential address, employment details, income details and two references that will not be contacted as part of the application process (usually) Once this process is complete we will advise if we should proceed to a full application. Providing our response to your application is positive, consider this a pre-approval. * All approvals a subject to lender approval and the information provided to be an accurate indication of your true position.
Pre-Approval
This process is completed during the application stage and only after serviceability checks have been completed by the finance manager will we verbally advise your application is to be submitted for a full approval. * If you are applying a business name or using an ABN and the loan application is not a Low Doc Loan, we must provide 2 years financials at this stage. This application now gets forwarded to the bank for a FULL APPROVAL, depending on the banks work load at the time or whether this is a motor vehicle or luxury goods application the wait time varies from an instant approval for previous clients with a excellent credit history upwards to 2 days, goods classed as luxury or leisure goods are boats, bikes, motorcycles, caravans, camper trailers.
Full approval
Your application has now been submitted to the bank or other financial institution for approval, this process can generate several outcomes. The banks computer will firstly generate a credit check, assess the application based on a points system and provided a response to us almost instantaneously. The answer can be one of the following DECLINED (generally due to a credit default) FULLY APPROVED (This is what we aim for) SUBMITTED FOR FURTHER ASSESSMENT (Do not worry this is normal) Whatever the outcome we will call or email and advise you of the outcome, we aim to do this within 1 hour and at every stage of the application.
Lets print Documents
We now start the documentation process. Based on the products you choose or applied for this can mean just a few pages (Low Doc Loans) or a joint business company application with 2 directors (About 100 pages or more) All application will require the applicants to be identified by us or another qualified authorised person. Usually a JP, Accountant or Police officer. Depending on which lender you are using this can differ also.
Once we have printed the loan contract documents we will email or organise a time to catch-up with the applicants for what we commonly call signup. Signup is when we visit you and explain the loan contract documents, your obligations under the bank contract.
Note: these are legal binding documents and should be treated as such. By law we are to provide each applicant with their own copy of the loan contract.
Once you are happy with the facts and figures, then and only then sign. You would expect to see itemised in the loan documents all fees and charges applicable to your loan, the interest rate you are paying clearly displayed on generally the front page and last but not least (the most important) the monthly, weekly annual repayment you are agreeing to pay.
NOTE: the best way to calculate the total repayments of your loan is to multiply this figure by the loan term. Make sure there are no other fees and charges to be paid outside of this contract/agreement. Be careful if you are to pay the loan out early MOST bank charge a early termination fee, this fee is calculated on a sliding scale and cannot be ascertained during the application process.
Providing these documents are completed correctly and the additional settlement information document have been supplied such as (Full comprehensive insurance, Certified ID, 1 X most recent payslip) we can then more to the settlement stage.
Settlement
Based on the fact our settlements team achieves a nearly 100% perfect strike rate your application will be settled as quickly as possible. One of our team will call you and let you know you are the proud owner of the goods you have purchased.
