So what’s going on behind the scenes while you wait for “approval” on your home loan? Last week’s blog; part 1 looked at obstacles encountered when submitting your application. Today we will explain the tasks your mortgage broker encounters to get your home loan approved.
Property valuation: an important step
When the lender issues a conditional approval, our next step is to organise a valuation of the property. The lender usually organises this and it’s an important step of the process as the lender can confirm the purchase price is reasonable and in line with market value.
Valuations can take up to five days because:
- The lender usually outsources and uses a third party valuer, so it is subject to their availability.
- Sometimes it can take a few days for the valuer to gain access to the property. If the property contains tenants, a real estate agent needs to notify the tenants and organise a convenient time for the valuer to gain access.
If the valuation comes in at the expected price, the next step is to organise Lenders Mortgage Insurance if it’s required. This usually happens within 24 hours of receipt of the valuation. From here, the lender is able to issue a final unconditional approval verdict.
Loan offer documents
At this stage, the contracts of sale can be exchanged at this point.
The lender issues a letter of offer, which generally takes three to five days from final approval. From here your conveyancer or solicitor will go over it, and make arrangements for you to sign and return the letter of offer to the lender.
On the home stretch towards SETTLEMENT!
Now the mortgage and other documents need to be prepared. Some lenders prepare the documents simultaneously, but this is usually finalised when you return the signed letter of offer.
As we look ahead to exchanging contracts and settlement, your broker will double check everything and make sure everyone has the right documentation. This point is a crucial part of the process, as we don’t want to experience any delays because the lender hasn’t received the right documents.
Setting up for settlement: who is responsible for what?
- Preparing mortgage documents - the lender
- Executing mortgage documents and returning them to the lender – you and your solicitor/conveyancer
- Title and other searches completed – the lender’s solicitor/settlement agent and your solicitor/conveyancer
- Stamp Duty concessions/exemptions – you and your solicitor/conveyancer
- Stamp Duty payment – you and your solicitor/conveyancer
- First Home Owner Grant receipt – organised by the lender’s solicitor or settlement agent
Now settlement can take place!
With so much to keep on top of, your mortgage broker will keep chasing all parties concerned – especially corresponding with the lenders. Our brokers have excellent relationships with the lenders on our wide panel, and frequently spend a lot of time on the phone on behalf of customers to keep things moving.
Don’t forget to check out last week’s blog; part 1 of behind the scenes of your home loan application!
Are you ready to start your home loan journey? Complete the contact us form at the top right of the page, or give us a call! 02 9358 4855