Getting Your Home Loan Approved
Outlined here are the key processes a home loan application typically travels through toward approval. Depending on the complexity of your situation, the time from the initial meeting with your mortgage broker to a final approval will take anything from a few days to a couple of weeks. A good mortgage broker should take you through this process and assist you to ensure it runs smoothly.
Credit Score
Understanding how a lender’s credit scoring system works can make the home loan process a lot easier for you and make the difference between a successful application and a failure.
Once your loan application is received, most lenders will now process it by loading your information into a Credit Scoring system. This is usually done by loading nearly every line of your application form and giving it a weighted score. If your score passes a pre-determined level, you will more than likely be ‘conditionally’ approved. If your application is in order, ‘conditional approval’ generally means you are approved, subject to property valuation.
Should you not pass the computer scoring system, your application will then go to a (human) credit manager. At this stage, they will manually assess your application and ask for additional information in areas that need clarification. Often, it is in this situation where a good mortgage broker will prove their worth.
Proof
You will need to prove your income and assets, liabilities, residency and savings for a standard home loan. No-documentation and low-documentation loans, however, require limited or nor proof of income. Additionally, you must provide proof of identity – this is not negotiable and is required by all lenders regardless of the type of loan you are taking out.
Credit Profile
Your lender will also take into account your credit history. For this reason, it is wise to retrieve your credit file and determine if there are any outstanding issues that may hamper your chances of getting your loan approved. Visit our credit file and bad credit history pages for more information on credit profiles.
Property Valuation
Your home loan approval is considered conditional until the property you intend to purchase has been valued by the lender. This will typically be conducted by an independent valuer who will assess the property and provide the lender with a report. The lender will then check that this value is within the parameters of the conditional approval amount, and if it is, sets the loan to unconditional approval.
It Is Important to Use an Experienced Mortgage Broker
All kinds of things go right and wrong through the home loan application process and the best way to ensure yours goes smoothly is to engage an experienced mortgage broker. Typically their services cost you nothing and they are very useful when you need things explained or forms chased up at the lender, to sign off authority and approve the loan. Good brokers know their lenders’ products and policies and understand how they work. They understand how a lender’s credit scoring system works and can help you provide the correct information and negotiate on your behalf.
Get an Experienced Mortgage Broker
To find an experienced mortgage broker in your local area, call us on 13 LOAN (or +61 2 9249 3739 for international callers) or email us the form below and we will return your contact within 2 business hours.
More information and home loan help
For more information on how and where to find a better home loan deal from an extensive panel of Australian banks and secure mortgage lenders, or to speak to your local area mortgage expert, contact us on 13 LOAN (direct +61 2 9249 3739)
