Are you preparing to buy your first home or investment property?

It’s an exciting time and nothing compares to the feeling of holding the keys to your very own property in your hand. If you’re new to purchasing property, here’s how the home loan application process works.

Understand your borrowing capacity

When it comes to purchasing a home or investment property, you need to first get a clear picture of your borrowing capacity and budget. How much can you afford to pay for the property? What amounts can you reasonably cover? Having a budget will help you narrow down your property search and avoid spending excessively. Inquire with us for an overview of your borrowing capacity.

Choose a lender

Next, it’s time to examine the options available and understand the different lenders. The most effective way to achieve this is to have us compare the market for you. Your 1st Street Mortgage Broker will be able to determine your financial situation and goals before suggesting an appropriate home loan.

Get pre-approved

Once you’ve selected a lender, your 1st Street Mortgage Broker can start the process of pre-approval on your finance.

This is when a lender decides, in principle, to lend you a specific amount of money. It’s also referred to as ‘approval in principle’ or ‘conditional approval’. You will still need full approval down the road, but obtaining pre-approved allows you to bid or make an offer on a property with confidence.

Arrange the required documentation

You will need to provide a variety of documentation to support your pre-approval application.

Requirements can vary from lender to lender, but usually speaking, they’ll want to check your:

• Proof of identity
• Proof of income and employment
• Credit score
• Deposit and savings history
• Expenses
• Assets and liabilities

Your 1st Street Mortgage Broker can guide you through the paperwork and ensure nothing is missed.

Review the pre-approval offer

If the lender determines you’re a appropriate applicant for a loan, they will issue you with a pre-approval letter.

Remember that pre-approvals are not a guarantee that you will get a home loan. You still need to meet the requirements required by the lender.

You shouldn’t have to pay for Pre-approval. There is no obligation to acquire a full home loan with that lender.

Pre-approvals are usually valid for three months.

Find a property and make an offer

After pre-approval comes the fun part – house hunting. Once you find the right property, it’s time to make an offer.

You’ll need to decide if you should stay with the lender that gave you pre-approval or shop around for another home loan.

Complete a full mortgage application

The last step is to complete the full home loan application for unconditional approval.

If you choose to go through the same lender that granted you pre-approval, most of the documentation will likely have already been completed. Your 1st Street Mortgage Broker will walk you through any other requirements needed.

As part of your application, your lender will likely get an independent valuation of the property. This helps them determine the risk associated with lending you the money.

If all goes smoothly and your mortgage application is approved, the lender will send you an unconditional loan approval letter. It is advisable to have your solicitor or conveyancer review everything to ensure it is in order before you sign the loan documents.

Settlement

Lastly, it’s time for settlement. At this point, the lender will verify that your documents are in place and advance the home loan.

Your legal and financial representatives will meet with the seller’s representatives to exchange documents and arrange the transfer of title. Stamp duty is typically paid at the same time as the settlement.

Then the property is all yours!

Ready to buy?

As a first-time buyer, getting your head around the home loan application process can be overwhelming. That’s where your 1st Street Mortgage Broker comes in.

Mortgage brokers may take the stress out of applying for a home loan. We have access to a broad range of lenders and understand which home loans may be suitable for your specific financial circumstances and goals.

Let’s talk about your property purchasing plans. Get in touch with us today.