Home Loan Approval Process 101: What You Should Know

 

We understand that sitting around waiting for your home loan to be approved can be a stressful time. At Launch we always endeavour to keep you informed every step of the way. To prepare you for what to expect, we have put together this handy guide so you know exactly what to expect, and when, during the application process!

How long does it take?

The process of receiving a response from the lender on your home loan can vary greatly depending on your circumstances. Most commonly, we see application approvals occurring within two days to a two-week time frame. If your application is one that is reasonably straightforward, you can expect to hear a response faster than someone who has a complex financial situation.

Lenders assessment of application

Before a lender can give formal approval, they will need to conduct an assessment of your application and a valuation of the property you wish to purchase. This process can be fast tracked by having a valuation ordered early in the application process.  Some things that may result in a poor valuation include zoning issues, land or property size or extremely poor condition of a property that would require extensive repairs to bring it back to a reasonable market value.

Lenders assessment of your repayment capacity

When your application is being assessed, the lender will look at your ability to repay the loan amount you have requested. This is where all of your financial information will be assessed, such as your income, liabilities and credit history. Full disclosure about any past credit issues or financial struggles is critical. We generally only see delays during this stage when information has been left out.

What happens after I submit my loan?

Once you’ve submitted your application, your finance broker will keep you updated with its progress right through until settlement. They will let you know if you need to provide further information or when to expect formal approval from your lender.

The home loan approval process can be a daunting time for any homeowner, but our experienced brokers can help reduce worry and are always there to answer any questions you may have and let you know what to expect along the way.

If you’re looking for a home loan, get in touch with one of our experienced brokers today.