Know the home loan process from beginning to end and inside out…….
Whether you are seeking to refinance your existing home loan or purchase a new owner occupied or investment property, the mortgage process is basically the same.
Prior to embarking on this decision, it is important to have an accurate knowledge of your assets, liabilities, income and expenses.
It is also quite important to conduct some personal research on the types of home loans available and what you need to apply for a home loan.
Start your search
After you have found a mortgage broker that really understands your needs, usually a face to face meeting is held.
At the meeting your broker should at all times conduct themselves in a courteous manner, introduce themselves and once again go over the initial telephone conversation making sure that no extra information is required or in fact missing.
Your broker will then qualify your requested application. They will check all documents to support your financial situation ie: payslips, rental income, family assistance etc. and discuss the loan amount and purpose of the loan ie: personal or investment use.
Once your mortgage broker has a clear understanding of your position and goals, they will discuss the various loan products available, they should provide you with home loan comparisons and determine your mortgage repayments, upfront fees and ongoing fees.
When and only when you are satisfied with your choice of home loan, an application form will need to be completed and signed by all applicants. Your mortgage broker will inform you of what will happen next and the approximate time for each step in the process.
Your home loan application is then reviewed by your mortgage broker, all details are double checked and any missing information is duly noted. The application along with all supporting documents will be forwarded to the lender to be assessed by processing staff.
The lender’s assessor will log the application, allocate it a file number and confirm receipt of the application with your mortgage broker.
The application will be thoroughly checked to ensure it has been correctly completed and has all relevant documents. If the application in incomplete your mortgage broker will be contacted and asked to obtain this missing information from you. The application will not in most cases progress until the requested information has been supplied.
A thorough review will be undertaken and relevant checks made.
All information will be logged into your file.
The assessor will now pass your file onto their team leader with a recommendation to either APPROVE or DECLINE your home loan application.
The outcome of your home loan application will be forwarded to your mortgage broker and they with inform you of the lenders decision.
Your home loan application has been approved subject to certain conditions eg: finding a property or a property valuation. The pre-approval usually lasts for 3 months and should cost you nothing.
The lender will order a valuation on the property to be conducted, (each lender has a list of approved valuers that they select from). This will ensure that you are paying current market value, and that they are lending within their guidelines.
Home loan approval, or not
The lender will issue an unconditional or full-approval when all conditions of the home loan have been met and when all associated costs have been determined. ie: stamp duty, lenders & solicitors fees etc.
Your letter of offer
This document will outline the terms & conditions and associated costs of the home loan. Get your solicitor/conveyancer to review the letter of offer, sign it and return it to the lender. The lenders solicitors will now prepare for settlement. The letter of offer becomes the credit contract when signed.
Those mortgage documents
Mortgage documents are sent with the Letter of Offer and outline the agreement between the lender, the borrower and The Office of State Revenue in your state. Details of the mortgage are recorded on the Certificate of Title along with the name of the borrower/owner(s) and the mortgage lender. This process will be managed between the lender and your solicitor/conveyancer.
Settlement occurs when the home loan proceeds are drawn down to pay for the remainder of the property and all associated costs. The lender and your legal representative will determine the date and manage the transaction.
Congratulations to you
All your hard work and stress has paid off. You are now a home owner – or if you have obtained a more suitable home loan, sit back, relax and celebrate.