Being able to purchase a home property is a life-changing experience. It is an accomplishment that somehow boosts your morale and provides satisfaction in many aspects. While purchasing a property is an ideal step towards improving lifestyle, the process can be very daunting.
Generally, the time it takes to get a home loan in Australia is four to six weeks from the time of submission of the application to the time of settlement of property. There are many factors that may affect the application which can prolong the time needed to complete the loan process.
These factors include:
1. Gather all required documents. You can help improve processing time by completing the documents required for the bank or lending institution to consider your loan application. Documents needed are usually as follows:
2. Fill out the application form. Regardless if you are an individual applicant or if you’re submitting an application with someone else, it only takes a few minutes of your time fill out an application form. For the record, it takes about 15-20 minutes.
3. Get a conditional approval or a pre-approval. It is important to note that a pre-approval is issued by a bank or financial institution based on your credit-worthiness which is fully investigated by the lending party. This means that the lender feels you are eligible to take out a loan based on the documents you have provided.
Pre-approval is a conditional approval pending full valuation of the property you are looking to purchase. The length of time for pre-approval depends on the circumstances surrounding your financial standing.
You can expect to hear from the bank within 3 days (3-day turnaround time) or within 7 days (7-day turnaround time). This depends on many factors that make an impact on your application.
Note that if your situation is complex and that you are viewed as a high-risk borrower, the process can take longer than the normal expected turnaround time.
If the bank or lending institution finds the document you have provided is sufficient and you meet their lending criteria, a pre-approval will be issued. At this point, you can now look for a property. The validity of pre-approval is within 3-6 months. So it would be best to have found the property within that specific time.
Once you have found the right property for you. Let the bank or the lending institution know so that they can start valuation to see if the property meets their criteria.
The time it takes for valuation to complete depends on your application and on the property you are looking to purchase. For full valuation of property, it usually takes 5-7 business days. Although this is the standard time for valuation, it still depends on how the vendor or real estate company respond to provide access to the property. The availability of the valuer is also one thing that can affect the length of time in valuation.
As soon as valuation has been carried out and you have received formal approval, Contract of Sale can be signed with the help of the conveyancer. The time between obtaining formal approval and Contract of Sale signing depends really on you and your vendor. Settlement date is usually set at four weeks right after signing the Contract of Sale.
A loan application can take longer depending on all the parties involved and all the circumstances surrounding your situation. You can make the process quick by engaging a mortgage broker. They have all the right connections to match you with the right lender, to help you gather all the required documents, and even to match you with the right property to fit your loan requirements.
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