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Loan Process

Steps of the Mortgage Loan Process

Mortgage loan process can appear daunting, but you don’t have to go through it alone. We will be your guide and help you.

To know what’s coming, is really helpful, so at each stage of the process you can be prepared to ask the right questions and make a decision that is best for you.

Here’s a guideline of what to expect.

Meet with a Mortgage Broker

We'll meet with you to understand your financial & lifestyle goals, answer any questions that you may have.

We'll search through hundreds of home loans to find the one that's right for you, calculate your borrowing power, work out repayments

Budgeting: How much home can you afford?

It’s important to take certain steps before you step into mortgage loan process. Most importantly, you should estimate how much of a house you can afford. This lets you set realistic expectations for house hunting and choosing a mortgage loan.

Consider Pre approval - A loan pre-approval sets you up for a smooth home buying experience. Today, the best way to approach a real estate agent is with a lender pre-approval. It shows that you’re ready and able to buy.

Prepare the application

We will complete and provide you with the best options for you to choose the loan that's right for you, we'll help you prepare the application and guide you through the process. Personal information and documents are needed to get a loan file through (Personal Info, Employment, Income, Expenses, Assets, Debts, Type of Mortgage). Things to consider:

Personal Information
  • Name & address for the applicants
  • ID Proof
  • Residential History
  • Dependents info
Employment
  • Name of current employer, phone and street address
  • Length of time at current employer
  • Position/title
  • Salary including overtime, bonuses or commissions
Income
  • Profit & Loss statement if self-employed
  • Pensions, Social Security
  • Public assistance
  • Child support
  • Alimony
Assets
  • Bank accounts (savings, checking, brokerage accounts)
  • Real property
  • Investments (stocks, bonds, retirement accounts)
  • Proceeds from sale of current home
  • Gifted funds from relatives (e.g. down payment gift for FHA loan)
Debts
  • Current mortgage
  • Alimony
  • Child support
  • Car loans
  • Credit cards
  • Real property
Property Information (If you have found a property of interest)
  • Street address
  • Expected sales price
  • Type of home (single family residence, condo, etc.)
  • Size of property
  • Real estate taxes (annual)
  • Strata Report if any
  • Estimated closing date
Type of Mortgage to consider
  • Fixed or Variable
  • First Home buyer
Conditional approval (Approval in Principle – AIP)

The lender will provide conditional approval. Which all state the conditions but will give you the freedom and confidence to look for your dream home. We'll stay in touch with the lender and keep you informed along the way.

House Shopping

Search online, approach an agent and Make an Offer, when you’ve visited properties with your agent and picked out the home you want, it’s time to make an offer. Let us know and we will help you get a property report.

Unconditional approval

Unconditional (full) approval is formal acknowledgement that your home loan application has been approved after they have provided a property valuation for one that you choose.

We will add the property details to the documentation, review all information in the loan file and assemble an orderly and complete package for the underwriter. They’ll open the file and get the following wheels in motion. underwriter is the key decision-maker. They closely evaluate all the documentation prepared by the loan processor in the loan package. They cross check to see if the borrower and property match the eligibility requirements of the loan product for which the borrower applied.

Complete loan documents

Your loan is both a significant financial commitment and a strong financial foundation.

Once your loan documents arrive, we'll organise a time to meet and help you complete the document. You will be able to review the information and sign the offer letter and Mortgage documents

Loan settlement

If you're purchasing a property, your solicitor / conveyancer will organise settlement directly with the lender, according to the settlement date on the contract of sale. If you're refinancing your existing home loan, the lenders will liaise directly to exchange the documents.

Home loan completion

Keeping in touch: our service doesn't end once your loan settles. We will stay in touch to make sure your home loan is the right solution for your needs now and in the future.

Do you have Questions?

A Mortgage Broker can help you compare many mortgages from a range of lenders, whether you’re applying for a first home loan, or simply seeking to switch lenders for a better deal.
Also, if you’re unsure about your borrowing power, a Broker can help you choose a home loan you can realistically afford. If you have any questions about your financial situation, it’s wise to seek advice from a professional finance specialist such as a Successful Ways Mortgage Broker.
For most lenders, times to close can vary quite a bit from one lender and loan type (Documentation and preparedness) to the next. Also, high volume can alter turn times.
Mortgage processing is when your personal & financial information is collected and verified. It is our job to organize your loan documents for the underwriter. We will ensure all needed documentation is in place before the loan file is sent to underwriting.
We will scrutinize your credit report closely, looking at your credit scores, payment history, credit inquiries, credit utilization, and disputed accounts. Lenders want to see a strong borrowing history where you’ve consistently paid back loans on time. We will also look very closely at your income and asset documentation to make sure you have enough cash flow to make monthly mortgage payments after your expenses
Underwriting turn times vary greatly depending on the institution. Many lenders will render an underwriting decision in as little as two or three days. But for some banks and credit unions, underwriting decisions can take a week or even longer.
The actual property inspection conducted by the appraiser can take anywhere from 30 minutes to a few hours. The times vary according to the size and details of the home. The full window — from the time an appraisal is requested by your lender, to when your lender receives the appraisal — is typically two days if not less
Typically, we will call or email you once your loan is approved. Sometimes, your loan processor will pass along the good news.
There are two types of mortgage loan approvals: conditional approval and unconditional approval. After your application is received, we will contact you for additional requirements to get your loan fully approved. Once those conditions have been met, you’ll receive final approval.
Underwriters have to protect the financial health of the lender. If your credit history, income, assets, and liabilities show you’re a higher risk applicant, the underwriter could deny your loan. Be sure you’re sharing up-to-date, accurate, and complete financial documents so your underwriter can get a precise picture of your financial life.
A larger down payment opens up more mortgage opportunities for borrowers, but not all new home loans require a large down payment. A low-down-payment loan typically requires mortgage insurance, which increases your monthly payment.
Credit requirements for homeownership vary between lenders and loan types. Typically, loans require a credit score of over 600. But lenders could set their own requirements which may be higher or lower.
Mortgage insurance premiums help protect your lender in case you default on the loan. A foreclosure typically costs the lender as well as the borrower. While mortgage insurance may seem annoying and expensive, it also helps you get approved if you can’t afford a 20 percent down payment.
Are you ready to start the mortgage loan process? If so, you can get matched with a lender below to begin your home loan approval.
Typically, a lender wants to see the last two consecutive payslips, breakdown and evidence of Funds to Complete (3 months of bank statements showing salary credits and savings pattern), 100 points of identification, and if you’ve found a new home, a contract of sale with names matching your ID. However, what is important to keep in mind is that all your ‘liabilities’ requiring regular monthly payments also have a very big impact on the size of the mortgage you can secure.
When selecting the right mortgage, make sure you choose a product with a competitive interest rate and repayment options that match your needs. Popular home loan categories including variable, fixed rate and split loans.
A variable rate loan is a mortgage which utilises an interest rate that generally moves in line with the cash rate determined by the RBA. So, when interest rates fall, your mortgage repayments fall. However, when interest rates rise, so do your repayments.
A fixed interest rate loan protects you against interest rate changes for an agreed time. This delivers some peace of mind as your repayments won’t change. However a fixed rate locks you in regardless of whether interest rates go up or down.
Split loans are simply a part fixed and part variable rate mortgage. They are popular with homeowners who want to take each way bet on interest rates.
Stamp Duty is a state government tax imposed on contracts, with the amount usually calculated as a percentage of the contract value. It is the tax charged for your legal documents to be ‘stamped’.
It’s crucial to factor your State’s Stamp Duty into your budget when purchasing a property.
Based on your circumstances and where you live, you might be able to obtain a stamp duty exemption, or concessions (discount) against the purchase of your first home. Stamp duty laws get changed often, so be sure to check your State Government’s website for the most up-to-date information.
These vary from State to State, but a government grant is money you could be eligible for and can go towards the costs of buying your first home. E.g. First Home Owner’s Grant (FHOG). If you’re building your home, there may even be other building grants you can apply for.
The legalities involved in buying and selling a home are referred to as ‘conveyancing.’
Typically conveyancing checks off any outstanding land taxes, will help uncover unresolved property disputes or illegal building work, and ensures the title is correctly changed according to your state’s current land title laws. Such issues can be plagued with legal landmines, which is why it is highly recommended that you employ the services of either a solicitor or a licensed conveyancer to handle the process of transferring a property from old owner to new.
You’ll generally be required by your lender to pay for Lenders’ Mortgage Insurance (LMI) if you borrow more than 80% of the value of a property.
LMI protects the lender from the risk associated with giving you a loan that is more than 80% of the property’s value. In the event that you default on your mortgage and the proceeds of the sale of your property fail to cover the remaining loan balance, the insurer pays the lender the shortfall. You can have your lender add the LMI fee to your total loan amount or pay it up front.
It’s important to know that LMI protects the lender only, not you. It shouldn’t be confused with income insurance, which replaces income if you’re unable to work, or mortgage protection insurance, which covers your mortgage payments in the case of death, sickness, unemployment or disability.
Every lender may be slightly different in what they want from you, but here is the general list of documents you will need in your home loan application.
  • Personal Identification (100 Points)
  • Employment Details and Income
  • Other income and assets
  • Savings History
  • Expenses and liabilities
  • Debt refinance details
  • Proof of purchase or building property
Although you’re not required to have life, critical illness or disability insurance, a mortgage is a large debt and should be life insured, for your family’s peace of mind.
You also need to factor in legal fees of a couple of thousand dollars, as well as stamp duty and lenders mortgage insurance (if your deposit is less than 20%).
In addition, consider paying for a pest and building inspection to uncover any hidden surprises before you take full ownership of the home, while there can be home loan establishment fees, document preparation fees, and even pro-rata council and water rates payable to the seller.
Yes. You can use the equity in your current property to help you purchase an investment property. Even if you have a mortgage on the property, you will likely have enough equity to purchase an investment property. Equity is the value of the difference between what your property is worth and what your mortgage loan is. For example, if you have a property valued at $500,000 with a mortgage of $300,000, you have $200,000 worth of equity. You may be able to borrow up to a certain percent of the equity to use toward investing in another property. Your home equity and anticipated rental income can help you buy another investment property sooner. To avoid Lenders Mortgage Insurance (LMI) you will want to keep your Loan to Value Ratio below 80%.
Generally, a deposit of 20% of the value of the property will save you from incurring additional fees such as Lenders Mortgage Insurance. Some lenders will let you borrow up to 95% of the purchase price and then let you borrow the cost of the Lenders Mortgage Insurance on top of that. Alternatively, if you don't have a deposit, you can borrow up to 100% of the property's purchase price, in two ways:
  • Family Pledge: which means that a family member offers their property as security for you to purchase your property.
  • 100% House and Land packages: allow you to borrow up to 100% of the price of the brand new home and land.
That’s good news, this means that a swift check on your serviceability of a loan has been done and it is calculated that you should be able to make mortgage repayments on the amount you have been pre-approved for. There might or might not be conditions to be fulfilled before an unconditional approval. It is important to get a full or unconditional approval before proceeding with any property purchase. This involves completing a home loan application and providing all the necessary supporting documentation.
A bridging loan is a shorter-term loan. It is typically needed when you are selling one property and purchasing another one. It is also used when you are waiting for the arrangement of long term financing.
Lender's Mortgage Insurance, as the name states, protects the Lender not you as the borrower. Lender's Mortgage Insurance (LMI) is a once off fee that normally applies to loans where the customer is borrowing more than 80% of the purchase price. LMI is scaled depending on the percentage you need to borrow (between 80 - 100%) and the amount of the loan
You can pay it upfront on settlement of the loan.
A mortgage offset account can reduce interest on your loan. Your mortgage is linked to an account into which your salary and other cash can be deposited. You can then withdraw the funds to pay your bills.
Use these savings for another deposit instead of paying off your current mortgage. Extra Repayments/Redraw Facility You can make extra repayments and create a 'kitty' for times when you have unexpected expenses such as plumbing or electrical repairs or for when you're not receiving a rental income. Some loans with this feature allow you to skip a mortgage repayment as long as you have enough funds in credit to cover that mortgage repayment
Generally, yes. You can add the stamp duty expense on to the principal amount of your loan. The stamp duty will be paid out of the cash you use as a down-payment on your loan. The amount of stamp duty you owe varies by state and by the value of your home.