Hi I get a number of requests from customers about the process after they get a home loan pre-approval.
So I just thought I do take you briefly through the steps from home loan pre-approval right to the settlement of owning your own house. So I hope it’s helpful.
Ahh so let’s talk about the home loan pre-approval first. Basically a home loan pre-approval is a an approval in principal. And the lender has done an assessment on your income, your liabilities, your credit history etc.. and they’ve assessed that you are able to borrow the amount of money, that you need to buy a house that is worth so much. So they give you a home loan pre-approval saying if you find the right place we will give you the money. That we said that we are going to lend you. So from there the next stage really is to find the house.
When you find the place, the vendor or the real estate that is working on behalf of the seller. They will give you a contract of sale and they will expect that you,… to show your intention that you will place a small deposit on that house usually about 0.25 percent. Now when you place that deposit on the house, that will give you a either a 5 or 7 or 10 day cooling off period. We generally ask for a 10 day cooling off period. Cause that gives time for firstly, your lender to convert that home loan pre-approval into a formal approval or unconditional approval, that means that they are going to do an evaluation on that house and just make sure that everything is correct in terms of the value evaluation on the market.
Also it gives your conveyancer the time to do pest control and the structural check on your house. Make sure that it’s ok. And just in case you don’t have a full 10% deposit to put on that house after your cooling off period, it gives your broker… mortgage broker time to go and get what’s called a deposit guarantee or a bond which actually sits in placement of that deposit until settlement.
So those 3 elements are all in play in that cooling off period. So after the cooling off period expires, then you will be expected to place a substantial a… 10 percent deposit on that house. So to show that you want to buy. And then from there you..whether it’s cash deposit or deposit guarantee. Then usually, you’ll have that… been sent to you, that loan contracts. So that’s,.. i’ll give that usually about a week after you receive a formal approval.
So make sure that you get your formal approval from the lender saying we are very happy to lend you the money based on the evaluation and based on your servicing, before you put that 10 percent deposit down. That’s really important. Otherwise it places you in a position where you let go of 10% and you’re not sure whether the lender is going to lend you the money. So make sure you do that, get the confirmation by formal approval from your lender and then you are able to place that 10%.
And then it is usually about 45 days from the cooling off period… the end of the cooling off period, where you pay your 10%, to when the loan settles and your transfers of deed are placed in your name. And you’ve basically own the house or are owning the house and paying off the mortgage.
So I hope that’s helpful. Am, if you still have more questions don’t hesitate to give ma a call or send me an email to markbmortgagebroker.com and i’ll be happy to help you out. So I hope that was helpful. Thanks.
This Video is the Best Quick Online Information About The Process of Home Loans Pre-Approval. It is similar prequalification with banks like Commonwealth Bank, ANZ, National Australia Bank(NAB), Westpact Bank and other lenders. You can try to apply even if you have Bad Credit rating.
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