Following the lodgement of a home loan application, hopeful borrowers are often keen to know what will happen next and how long it will take for them to receive the verdict.
The bad news is that there is no one-size-fits-all answer. However, the good news is that a solid application is the key to a short approval time – this is why choosing the right broker is so important!
Here are the 6 key steps to be aware of:
1. The amount of time it takes for you to receive a response on your home loan application can vary. It’s most common to receive an answer between two days and two weeks, depending on a range of factors. The more complex the circumstances are, the longer it can take. Lender turnaround times will also be heavily influenced by their volumes at the time.
2. Before offering conditional approval, your potential lender will need to make an assessment of your application and conduct a valuation of the property. Valuations are critical to the credit risk assessment undertaken by the lender when assessing your application. It will expedite the process if you have a valuation done in advance, provided it is acceptable to the lender.
3. The lender will also assess your capacity to repay the loan amount you have requested. This is where all of the information about your salary and liabilities come into consideration, and where accurate and complete information is essential. There can often be some to-and-fro between you, your broker and the lender should the lender request further information as the credit assessment takes place.
4. Your potential lender will then make an overall judgement of you as a borrower. The complexity of your financial history will affect how long this takes. The biggest red flag to a lender is non-disclosure of liabilities, so, it is always best to provide full and comprehensive information about your financial situation.
5. The complexity of the application process is just one of the reasons to engage an experienced mortgage broker, as they can explain the requirements and handle the application process for you.
6. Following the submission of an application, you can expect your broker to be in touch with you to update you on progress and to notify you of the outcome. If your application is approved, your broker will also advise you of when to expect a formal letter of approval from your lender and assist you with any queries right up to and beyond settlement.
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