Purchasing a property and obtaining a home loan to finance your purchases can sometimes be dragging and a bit stressful. It is the task of mortgage brokers to ensure applicants that they will get the most favourable contract in home loans that would cater to their needs. Mortgage brokers usually meet with their clients on a regular schedule and organise the necessary preparations and pertinent papers needed for their client’s convenience. And once the loan application has been submitted, a lot of questions usually come up like:
- What will happen to my submitted home loan application?
- Why is the process and approval taking so long?
Submitting the Home Loan Application
After the mortgage broker and client’s meeting is done, the brokers generally review the home loan application and any available First Home Owner Grant. Most of the time, this can be done online and this step can be easily completed. Mortgage brokers will check if the application has the right personal information including the:
- Personal Identification – e.g. driver’s license
- Financial history and information – bank statement copies, income tax returns, proof of income, or any details or current financial commitments
After the home loan application is submitted, the lenders will usually take 7 – 10 days to do the whole process and get back to the mortgage broker for the response. The response could range from conditional or indicative approval, or a request for any missing information.
The principal reason for the pending approval can be the following:
- Lacks any required or additional documents
- There is a need for a confirmation
- Outstanding valuation
- Lenders Mortgage Insurance Approval (if applicable).
The loan providers will need to make sure that you are capable of paying the home loan, therefore you need to give them all the required paperwork. In the event that they will need to make some clarifications on some of the additional documents, expect that the home loan application process may take longer.
Bear in mind that the home loan application processing varies from every lender and this will depend on the following:
- Time of Year – Most of the time the busiest times are Easter, Christmas season and the end of the financial year.
- Complexity of the home loan application
- If the lender requires more additional documents
- The quantity of home loan applications currently assessed by the loan providers
- Mortgage insurance requirements
Dealing with a trusted mortgage broker is very beneficial especially if your home loan application has long been delayed. Mortgage brokers can recommend you to other loan providers that will cater to your application and get the approval within your desired period.
To further learn more about the home loan application process, check out the PART 2 of this post. The post will discuss about loan documents, property valuation, and what takes place during a settlement. Good Luck!