Research and Pre-Approval
The first thing you’ll want to do is research the type of rates available from different lenders. Home loans can differ significantly and you will want to factor several considerations – including fixed or variable rates, payment plans and other terms and conditions – into your final decision. You’ll also want to set yourself a budget and determine the amount of money you need to borrow. Getting pre-approved for this amount could be a wise idea if you are still shopping around for the perfect property. Pre-approvals tend to last for up to three months and can help you move more quickly once you have found the perfect property.
Documentation You May Need
During this application process, you’ll be asked for several pieces of documentation. This includes showing that you have enough savings to cover the deposit on your property and other fees that may be applicable. If you are self-employed, you may be asked to show tax returns and other financial information from the past two years, while anyone who is employed will need to show evidence of their payslips
Making Your Purchase
Depending on whether you are planning to buy at auction or make an offer on a property, you’ll find there are some slight differences in the transaction process. If you are buying at auction, you will usually be required to pay a ten per cent deposit at the moment the hammer falls. Your deposit is then held in trust by the agent – and any interest earned is split between you and the vendor during the settlement process.
Processing Your Loan
At all stages of this process, it is important to ensure your lender remains informed – they will be able to process your loan more quickly if they are aware of all the details. This information includes the contact details of your solicitor or conveyancer, real estate agent and vendor, as well as a copy of the contract of sale. Once a valuation has been carried out and all the other documents have been received and processed, your lender will grant formal approval on your loan and the documents will be sent to you. At this time, you will need to sign these documents and return them. Your solicitor or conveyancer will then liaise with your lender until the loan settles.