STEP 1: The assessment process

  • Your application is with the lender, they will now start the assessment.
  • There can be (lots) of questions. That is ok, lenders are pretty picky, we just have to work through the questions to come to a decision

STEP 2: Approval

  1. There are two types of approval:
    1. Conditional approval: The lender is indicating it all looks ok, there are just a few documents to supply or conditions to be satisfied. This is good news! Now we work on those conditions so that the lender is comfortable with every aspect of your application.
    2. Formal (unconditional) approval: Congratulations! You have obtained home loan approval! All the conditions have been met, the lender has agreed to your request and you have been approved for the loan. Now the paperwork begins.

STEP 3: Mortgage documents

Now the paperwork begins. The stress and time challenge is all done. The period from application to formal approval (which is often done during the cooling off  period) means time pressure. Now that is done, the process is much calmer. Settlement is usually 42 days after signing of the contract.

So if you had a 5 day cooling off, you have about 37 days left to get ready for settlement. With formal approval done, the bank will instruct their solicitor to create the mortgage documents. This is either a thick paperwork pack that is mailed to you or an electronic pack emailed to you.

The common documents in the pack are:

  1. Loan offer document
  2. Mortgage
  3. Loan disbursement authority
  4. Terms and conditions
  5. Direct debit request form

These all need to be reviewed, signed (witnessed) and returned. When they have been received back by the bank they are verified for acuracy and if that is all ok your application is marked “ready for settlement”.

STEP 4: Settlement.

When your application is “ready for settlement”, Your solicitor will liaise with the bank to arrange a time and date to settle the mortgage. At settlement the property transfers into your name and your mortgage starts. A first payment is due on the “aniversary date” of your mortgage settlment (so a week or a fortnight or a month after settlment, dependent on your chosen repayment schedule.

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