Finding a home to buy can take time. When the right place comes along it can feel like you need to stake your claim by signing the sale contract fast.
If you’re after a home loan to complete your property purchase, you need to include a finance clause within your contract. The requirements for this vary state to state, but your contract needs to allow time for your Lender to provide an approval.
The timeframe for finance to be approved is usually between 14 – 21 days. You may be able to negotiate this time period with the seller – ideally aiming closer to 21 days to give yourself maximum time.
If you can’t sort your finances within this time period, the seller may be able to cancel your contract. So, there’s a lot riding on getting your home loan approved efficiently.
The general rule for loan approval times
How soon your home loan can be arranged often varies between lenders.
Some lenders boldly claim that it can take as little as an hour.
But that’s not usually the case.
You should aim to allow for about three weeks from the time you sign your contract to having the loan approved.
Settlement should then happen within 14 days after finance approval.
14 days allows time if documents need to be posted (for example, mortgage documents in Western Australia need to have ‘wet signatures’ and can’t be signed electronically).
If you require funds sooner than that, please speak to one of our Home Finance Managers for help before signing a contract.
Remember – you want to find a home loan that matches your needs, rather than racing in for a mortgage that can be arranged in record time.
5 ways to help speed up the home loan process
Fortunately, as borrowers you can do plenty to speed up the loan process.
Here are five steps you can take to help keep application and approval times tight:
1. Talk to us first
We can explain your borrowing power, let you know how big a deposit you may need, and check if your finances are in the shape it takes to get an approval.
2. Get your paperwork together
Gather all the documents The Capricornian will need, such as payslips, Passport, Drivers Licence and possibly other ID, plus bank account statements for the past 3-6 months. Our Home Finance Managers can provide details of what documents we will need specific to your personal circumstances.
3. Maintain the Status Quo
Big life changes, such as starting a new job or business just before you apply for a loan, can be obstacles to getting a loan approved. Stick to your budget, your usual spending and saving patterns, and don’t take on any new debt as this will reduce your borrowing capacity.
4. Double check you’ve completed the application accurately
Make sure you provide all the information requested, even if it seems minor. Complete the online application form accurately and honestly. Ensure you follow all the steps correctly as they are important. Every time we need to come back to you with questions will delay your approval.
5. Ask us about loan pre-approval
Waiting until you’ve paid a deposit to apply for a mortgage can be a high-stakes, high-stress strategy. Loan pre-approval is a way to help you speed up the loan application process while also potentially boosting your bargaining power with vendors. Contact us today for more tips on getting your loan across the line – we’d love to help you move into your new home sooner.
Contact us via the website or call 1300 314 900 – our local lending specialists are here to help.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
