Understanding the Home Loan Application Process

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For many home buyers, the home loan application process can feel daunting. How can you ensure that you’re getting the right loan product to suit your needs.

By improving your understanding of the home loan application process, you can set yourself up for success. You’ll be able to determine the best loan pathway and navigate a successful loan application with confidence.

So what do you need to know about applying for a home loan? Follow these simple steps!

Apply for pre-approval

The first step is home loan pre-approval. While this step isn’t essential, it can help you take the stress out of securing a loan before you find the property of your dreams.

Begin by speaking to a skilled mortgage broker or a home lending specialist. You’ll be asked to provide a range of documents, including identifying information and proof of your financial situation.

By submitting a pre-approval application, you can get a clearer sense of your total borrowing power and cut down on time demands when you’re ready to make an offer. This could help you avoid missing out on your dream home!

Apply for a home loan

If you didn’t apply for pre-approval but have found the perfect property, don’t panic. You can still apply for a home loan to support your purchase.

Working with an experienced mortgage broker or lending specialist, you’ll need to provide information relating to your identity and financial circumstances. This may include tax returns, proof of employment, and details of any existing debts.

Your lender will assess your borrowing power based on your loan serviceability, determined in accordance with your credit score and regular income and expenses.

Throughout the application process, you may also be asked to provide further information.

Secure your property

Next, you’re ready to secure your property! Once your loan application is accepted, you can move forward with your offer.

When your offer is accepted, you’ll be asked to sign a contract of sale, detailing price demands and settlement terms. From here, you’ll need to arrange a building and pest inspection and prepare to pay any relevant fees, including stamp duty.

After this, you’ll be asked to pay a deposit towards your home purchase. This is a fee you pay outright instead of borrowing it as part of your loan.

Sign and settle

Working with a solicitor or conveyancer, you’ll need to review and finalise any loan documents before moving forward with the settlement process. This usually takes four to six weeks.

You may need to organise home insurance prior to moving in to your new property. You’ll also need to arrange the final details of the settlement process, including a date.

On this date, you’ll need to pay all fees owed and pick up the keys to your new home, taking over ownership and beginning with your first loan repayment.

If you need help with your home loan application, see the list of best mortgage broker Melbourne on Our Top 10.

 

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