The home loan process isn’t so scary. Once you know what to expect, you’ll be better armed to purchase a property, and feel more confident.
Before you can nab yourself your very own property, you need to go through the process of securing a home loan. The trouble is, if you don’t know what you’re in for, the experience can seem daunting. That’s why we’ve put together this short guide for what you, the buyer, can expect from the process of securing a mortgage.
Speaking to a broker
The first thing you’ll need to do is talk to a mortgage broker. They’ll ask you a number of questions – your employment history, your income, your long-term goals, for example. After this soul-baring session, they’ll use the information to work out your borrowing power, and find the right loan product for you. They’ll also explain all the various fees, charges and costs that are involved, to make sure you’re on the right track.
Sorting your application
Now that you’ve picked your home loan, it’s time to apply. Your broker will be right there to offer you a guiding hand through the process. They’ll let you know what documents you need to provide, and you’ll also go through the age-old ritual of filling out and signing a number of forms. The broker will send off the application to the mortgage lender when it’s done and dusted.
Seeing about your information
Once the lender gets your application, the ball’s in their court. They’ll spend some time going through the information you’ve provided to make sure all the details check out. They’ll also use a credit reporting agency to check your credit history. If you pass, then congratulations – you’ve obtained conditional approval for the loan, so called because it depends on certain criteria being fulfilled, such as satisfactory valuation of the property.
Setting up a valuation
Next, it’s time for you to find a property you like, if you haven’t already. Once you’ve gone through the many, many options out there and found one that catches your eye, inform your broker, and the lender will carry out a valuation of the property. This way the lender is satisfied that the property will be a good security for the loan – in other words, something they can sell to make up the loan if you default on it.
Signing the contract and settlement
When the dust has settled, you’ll get unconditional approval from the lender. You’ll receive your loan documents, which you’ll have to carefully read over and sign off on. Once done, return them to the broker, who will pass them on to the lender. Once you buy a property and exchange contracts, your conveyancer or solicitor will contact the lender to arrange a settlement date, upon which they’ll finalise the purchase.
Congratulations! You’re now the proud owner of your own home.