So, what actually happens while you are waiting for the approval of your loan? In PART 1 of this article, we have discussed about what is involved after the submission of a home loan, the requirements, and what could be the possible reasons for the delayed approval of your home loan application. Here, we are going to learn the succeeding processes and what other requirements that you will need to comply with that will ensure the approval of your mortgage.
The Significance of Property Valuation in the Mortgage process
In the event that the loan provider will issue a conditional approval, the next thing to do is to make a property valuation. This is often organised by the loan provider and is considered one of the most important step during the process since it will allow the loan provider to confirm if the purchase value of the property that you are aiming to buy is compatible with the current market value.
This process may take up to 5 days because of the following reasons:
- The loan provider will outsource the valuation and they will need to wait for the availability of the assessor.
- It may take a few days for the assessor to have access to the property. In the event that the property has tenants, it will require real estate agents to help – they are responsible for notifying the tenants and book the assessor at the most convenient time.
Assuming the valuation comes as expected, the next thing to do is to get a mortgage insurance approval (only if mortgage insurance is required). This can take a couple of days after the valuation receipt has been accepted. During this time, the loan provider can issue a final unconditional approval. Then again, the process will take place a day after the mortgage insurance approval.
Loan Offer Documents
The loan provider will issue a letter of offer and this normally takes 3-5 working days after the final approval. The documents are to be reviewed, signed and returned to the lender.
The Settlement and Closing of the deal
The mortgage, including the additional documents, will be the next in line. This commonly happens when the letter of offer has already been returned. Occasionally, there are other lenders who will simultaneously prepare all the necessary documents.
Before settlement, the mortgage broker will see to it that all the requirements and necessary documents are accounted for. This is a crucial step and you don’t want to have any delays before the bank will receive all the necessary documents.
Who is responsible for the settlement documents?
- The loan provider will prepare all the mortgage documents
- The Executing mortgage documents will be completed by you and your mortgage broker
- Title and Other Searches will be completed by the lender and your settlement agent
- Stamp Duty Concession and payment will be organised by you and your settlement agent
- First home owner grant receipt will be organised by the loan provider
So, that would be all for the entire mortgage application process. There are actually a lot of things to comply with, and a reliable mortgage broker can prove to be a great help especially in making arrangements for the lenders. You need to find the right mortgage broker so you’ll have a sound relationship with the loan providers and other known panel and generally to achieve the approval of your home loan application.