Explaining the Loan Process
Got some questions about the loan process?
Speaking with a broker in person is sometimes the greatest way to have a better understanding of home loans, how they work, and how to choose the correct one.
When you sit down with us, it gives us the opportunity to get to know you better so we can better understand what you need right now and what your financial goals are for the future.
It’s an opportunity for you to ask all of your questions regarding locating and choosing a loan, applying, the approval procedure, and what happens next.
The good news is that we can come to you whenever and wherever you want – at your home, business, or café… day, night, or weekend.
How does the Process work?
Arrange a pre-approved loan
A pre-approved loan can be beneficial if you haven’t begun your property hunt or are still looking.It gives you a clear view of your spending restrictions and the assurance that if you locate a home you love, you’ll be able to make an offer promptly.
It may also give you a leg up on other potential purchasers who do not have pre-approval.A subject to finance clause is, of course, an important safeguard in any sale contract, even if the buyer has received a pre-approval.
Make an offer and sign a Contract of Sale
You’ll be asked to sign a Contract of Sale whether you buy at auction or make an offer on a listing.The selling price, as well as any terms and conditions, will be confirmed in this contract.You’ll want to include terms like “subject to lender approval,” “building inspection report,” and “pest inspection.”
The time between signing a contract and settlement — when the property is legally yours – is usually six weeks (shorter in some states, such as Queensland).
Note that even if you have a pre-approved loan, your lender will need to conduct a valuation of the property you’ve chosen before providing full approval, and if that assessment isn’t suitable, your lender may refuse to give final approval of a loan to buy that property.
Pay a deposit
Once both parties have signed a Contract of Sale, a deposit is required.
Your deposit will have to come from savings or somewhere else because you won’t have access to your house loan until later.
You may also be able to secure a deposit bond until the transaction is completed.
Unconditional contracts
Signing an unconditional contract or bidding at an auction should be avoided if you are unsure if you will be able to secure financing or whether you will be able to purchase the home.
Before signing a sale contract or bidding at an auction, you should also get legal guidance.
Find your property
When you’re looking for a new home, make sure you do a lot of research.
Examine local property values, capital growth possibilities, and existing and planned infrastructure, such as roads, public transportation, schools, and retail outlets.
If you’re not familiar with the area’s property values, get a comprehensive appraisal from a registered valuer before making a final decision.
Appoint a conveyancer
To consummate the sale, you will require the services of a conveyancer or solicitor.Your conveyancer should also ensure that all rates and taxes have been paid, that the property has received any necessary land use or building approvals, and that any necessary searches have been ordered.They might also be able to assist with any inspections.
On settlement day, your conveyancer will verify that the correct amount of money has been transferred from your lender to the seller, as well as that all fees, including Stamp Duty, have been paid, allowing you to acquire legal title of the home.
Cooling off period
If you didn’t acquire your home at auction, you may be entitled to a cooling-off period during which you can cancel the contract with a minor penalty.
In other states, cooling-off periods do not apply, so check with your state’s competent body to see what your options are.
