If you’ve recently started your home loan process and are worried about how long it’s taking, fear not. Loan pre-approval can take a few days to several weeks as lenders verify your financial and property information.
Buying your first home can feel overwhelming. In this article, we’ll provide a short guide on home loan preapproval and some vital tips on how to speed up the process.
Let’s get to the following commonly asked questions:
The home loan approval process is when a lender reviews the applicant’s financial situation to assess whether they’d be eligible for a home loan. During the loan application, the lender assesses the borrower’s credit history, in goings and outgoings to assess their ability to repay them.
Once the lender is satisfied, the loan contract will be approved, and the borrower will receive a “conditional approval.” They can then start the buying process.
If the lender is satisfied with the borrower's financial information and determines that they meet the necessary criteria, they will approve the loan application and provide the borrower with the funds needed to purchase the home
To receive home loan approval, lenders consider several factors, including:
Home loan approval time depends on the lender and the loan amount you’ve applied for. On average, the home loan process can take a few days to months.
The initial home loan pre-approval process takes up to a week as the lender assesses your eligibility by reviewing your financial information, credit score, and in goings and outgoings.
Once you’ve found your chosen property and finished the application process, the lender will need a few more days to conduct a property valuation and ensure the information you provided about the property’s value is accurate.
Once you receive final approval, the lender will send you a loan offer outlining the terms and conditions of the loan. This will include details such as the proposed interest rate, fees, and repayment schedule.
After accepting the loan offer, it can take a few more days for the bank to finalise the loan.
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The home loan application process can take a significant time since the lender needs to thoroughly assess the borrower’s financial situation, credit history, and the property they wish to purchase.
Credit checks can also take time, as any discrepancies or errors on a credit report need to be resolved before the lender can approve home loans.
Once the borrower has found their desired property, the lender needs to confirm the property price, which can take time if there are few comparable sales in the area.
Unconditional or formal approval is when a lender formally agrees to provide the borrower with a home loan if specific terms are met. When formally approved, the lender has fully assessed the borrower's financial situation and the property details and is confident they can make their monthly repayment.
This is a significant milestone in the home-buying process, as the borrower can confidently offer their desired real estate.
Approval processes can take time and effort, meaning you're losing valuable time that could be spent on property searching. If you’re about to apply for a home loan but want to ensure you’re approved quickly, here are some handy tips to speed up the process.
Tip: Using WeMoney's home loan calculator can be a helpful tool for anyone looking to obtain approval for a home loan, as it can assist with determining the amount of money that can be borrowed, estimating the repayments, and comparing different loan options from various lenders to find the best fit for their needs and budget.
Whether you’re just starting the application or are home loan approved, it’s essential to understand what lenders need and why they take time to evaluate your circumstances.
If you liked this article, stay up-to-date with the WeMoney blog, where we post regular financial content to help you achieve your monetary goals. Alternatively, read our recent article, ‘When is the first mortgage payment due after settlement in Australia?’ for more home loan advice.
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Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not consider your investment objectives, particular needs, or financial situation.