The 10-Step Home Loan Application Process

You’re interested to apply for a home loan, but you do not know how. You simply don’t know where to begin, and there are so many questions going through your mind. Questions such as the following: How do you go about it? Where do you start? What are the requirements? How long does the whole process take? Who can help you?

Where can you find the answers to all these questions?

You’re in the right place because this article will try to provide you with the answers to your questions.

Home loan applications follow a set procedure:

Step 1. It is essential that interested borrowers should do some preliminary research about home loans and home loan options from the Internet first. Check different lender websites. Look into their documentary requirements and make a list of these requirements. This early in the process, work on completing all the documentary requirements to speed up the whole application process.

Step 2. Those who are not confident that they can do the whole application process by themselves, there are Loan Market mortgage brokers who can help and assist. Loan market mortgage brokers will discuss with the applicants the different home loan options available. So if you are serious about proceeding with your loan application, be sure to listen well and ask questions if you need clarifications or more information. Know what you want; this is the key!

After choosing the best loan option, you may now proceed to step 3:

Step 3. Be ready to submit all the necessary documentary requirements.

Step 4: At this stage, the lender/lending institution will review your application and see if you meet their basic requirements. They will look into your income, employment, and they will also check your credit worthiness. The lenders will base their initial decision on the documents you will be required to submit at this stage. 

Step 5: If the lender finds your application acceptable, you (or your broker) will then receive a conditional approval. The lender will also inform you or your representative if you need to do more so that they can issue an unconditional approval.

Step 6: During this stage, the lender may order an estimation of the property you want to buy. Your broker will tell you if the cost of the security assessment is already included in your application fee or not.

Step 7: If you pass Step 6, the lender will then submit your application for appraisal of Lender’s Mortgage Insurance (LMI).

Step 8: If you successfully meet all the requirements at his stage, a Letter of Offer will be now be issued by the lender which means that your home loan is unconditionally approved.

Step 9: At this stage, loan documentation is issued and will be sent to your solicitor/conveyancer who will then coordinate with the lender for a settlement date.

Step 10: Lastly, you need to decide on the type of insurance you want, of course based on your specific needs. The choices are (1) Home and Contents Insurance, or (2) Life/Income Protection. It is essential that you already decide the type of insurance as you will be required to start your insurance cover prior to settlement.

On the question on how long it takes for the whole process to finish, under normal circumstances it can take be as short as a few days to a couple of weeks. One aspect that can hasten the process is the availability of requirements; hence it’s very crucial that you know well ahead of time what these requirements are so you can prepare them already. A conservative time frame would be 2 weeks or at least 14 working days for the approval and another 2 to 3 weeks for final settlement.

So it’s really simple: if you want the process to be faster and stress-free, prepare everything that you need well ahead of time.

About the author: Siena Lombardi is a research and technology writer for Phoenix kiosk, a touch screen kiosk manufacturer firm in Tempe, AZ. Phoenix Kiosk specializes in kiosks, software and technology for small to large size organizations.