Here are the general steps that you can expect when going through the loan process and the documents that you may need to get the process started:
Taking out a home loan today is far more complex because of the range of products available. Loans need to be structured to fit the individual requirements of each client. Considerations we take into account are:
Application, legal valuation fees
Exit fees if applicable
There are a myriad of lenders, loan types and products on the market. Our brokers will ask you many questions about your current and future circumstances and your finance needs to determine the right lender, loan type and product for you.
All the ‘hidden costs’ and facilities of your loan product will be explained to you. This includes the application and discharge fees that can differ wildly between lenders. Finding and buying a home can involve extra costs equivalent to 5% to 7% of the purchase price. These fees may include – application fees, stamp duty, mortgage insurance, solicitor fees and valuations.
When applying for any home loan, lenders require certain information and documentation.
This information will differ depending on the lender and loan product. Documents to verify your income and asset/liability position may include:
• Letters from employers
• Tax assessments
• Tax returns
• Evidence of government benefits
• Land and water rates notices
• Statements of existing home loans/personal loans/car loans
• Credit card statements
In more detail:
• ID – Drivers License AND Passport
• 2 most recent pay slips (if PAYG) plus recent group certificate
• Most recent 2 years tax returns and ATO tax assessment notices if self-employed (personal and company)
• Recent rental statement for investment property (if applicable)
• 6 months recent savings statements (if purchasing)
• 6 months recent home loan statements (if refinancing)
• Most recent months statement for all bank accounts, credit cards, personal loans, car loans etc
• Most recent Superannuation statement
• Most recent Life/Income Policy statement
• A contract for sale of home or land (where applicable) When applying for a home loan, lenders require particular documents to validate the information you provide. Below is a list of these ‘supporting documents’
Your broker and their personal assistant will advise you of what is required.
Additionally in the case of a property purchase a sales instruction from the sales agent or contract of sale from the solicitor will be required. For investment properties a letter evidencing the expected weekly rent may be required.
Typically, your application can not be submitted to the lender until all necessary documentation is provided.
Once your application is received by the lender a number of initial checks are conducted. These include verifying you can ‘service’ the loan, a credit report and in some cases verification of your employment status by your employer. If valuations are required they will be ordered. If the loan is subject to mortgage insurance, your application along with your credit report and the valuation report will be sent to the mortgage insurer for assessment. Some lenders will run a title search prior to approval. T\his can take up to 72-hours.
If you are Selling or Refinancing?
Your current lender will need to be notified that your mortgage is going to be discharged and that your loan will be repaid. You can find the discharge forms for all the major Australian lenders below.
3a. Conditional approval
If the lender believes your situation to be suitable enough to support loan repayments at first glance, a conditional approval will be issued with a list of further conditions to be fulfilled. Please note that the conditional approval is not a set indication that you will be eligible to receive the loan.
3b. Formal approval
Once the specified conditions have been successfully met and a valuation of your security property and assessment for lender’s insurance (LMI), a formal approval will be issued.
Once your application is unconditionally approved we will forward confirmation in writing to both yourself and your solicitor (in the case of a purchase).
The exchange or refinance process begins here. It is recommended that building insurance is taken out on your new property at the time of exchange.
Following formal approval, documentation for your loan will be issued from the bank. Once signed and returned to the bank, it takes approximately 3 to 4 business days to certify the documentation
Your lender will issue these documents to MasterFinance Your Broker will make an appointment with you to take you through the documents and explain in detail the terms and conditions of the offer and the features of your loan product.
If you understand your offer and are happy with your loan offer you can sign your documents at the appointment. Alternatively you can take your loan offer contract away for further consideration.
Once signed, your documents will be checked for correctness and completion by MasterFinance and subsequently returned to the lender.
After document certification, the loan can be booked for settlement (a process that will have to be carried out by a conveyancer or solicitor in circumstances of the sale of home / land). Funds will be available generally one business day after the settlement of your loan.If you are purchasing it is your solicitors responsibility to book and attend settlement on your behalf. In the case of refinances MasterFinance will track settlement of your loan on your behalf.
Once your loan settles we will advise you and your solicitor.
After your loan settles we will be in contact with you to ensure you are aware when your first repayment falls due and where it will be coming from. We will take the time to ensure you are happy with your loan. MasterFinance will be in contact with you throughout the life of your loan to ensure it remains the best product for you.