The home loan process

Why use a broker to find a home loan? Buying a home is one of the most important decisions you will make in life As soon as you start thinking about a mortgage there are many questions you will need answered from how much you can afford to how it all works There are many financial providers who lend to home buyers Lenders have differing criteria for an application to be successful Lenders have differing terms and interest rates You probably do not have the time to extensively research the market before committing to a mortgage, your broker will do this for you We can start by looking at the home loan process, how it moves from application to settlement and some points for you to be aware of throughout the different stages

Why use a broker to find a home loan?

Buying a home is one of the most important decisions you will make in life

As soon as you start thinking about a mortgage there are many questions you will need answered from how much you can afford to how it all works

There are many financial providers who lend to home buyers

Lenders have differing criteria for an application to be successful

Lenders have differing terms and interest rates

You probably do not have the time to extensively research the market before committing to a mortgage, your broker will do this for you

We can start by looking at the home loan process, how it moves from application to settlement and some points for you to be aware of throughout the different stages

STAGE 1 ~ APPLYING FOR A HOME LOAN Your broker will begin by asking about you, about the type of property you are considering purchasing, what you may like to include in the loan facility- for example some lenders have lower account keeping fees, redraw facilities, loan portability, split interest schedules etc and generally build a good profile to match you to the best loan During the application process you will be asked for personal, income and employment details and will be asked to provide 100 points of ID for each applicant Proof of income Bank Statements Property details Estimated costs and means of financing the property You may also be asked to provide additional information to support your application. Once your broker is happy with the completed application it will be submitted with the agreed lender for consideration.

STAGE 1 ~ APPLYING FOR A HOME LOAN

Your broker will begin by asking about you, about the type of property you are considering purchasing, what you may like to include in the loan facility- for example some lenders have lower account keeping fees, redraw facilities, loan portability, split interest schedules etc and generally build a good profile to match you to the best loan

During the application process you will be asked for personal, income and employment details and will be asked to provide

100 points of ID for each applicant

Proof of income

Bank Statements

Property details

Estimated costs and means of financing the property

You may also be asked to provide additional information to support your application.

Once your broker is happy with the completed application it will be submitted with the agreed lender for consideration.

STAGE 2 ~ Some lenders may require a processing fee although this is usually factored in to the total loan amount The lender then evaluates the applicant/s for eligibility and capacity to repay and begins to verify all the information provided with your application STAGE 3 ~ Once the lender is satisfied you will receive a pre approval for the home loan, which will outline the major terms and conditions of the loan, the loan amount and the length of time for which the pre-approval will remain valid. STAGE 4 ~ You are now in a position to find the property you would like and to place an offer on that property – a word of advice since you are waiting for finance you must make sure that in making an offer to purchase a property The Contract of Sale is made SUBJECT TO FINANCE- this will protect you if your finance falls short of the purchase costs.

STAGE 2 ~

Some lenders may require a processing fee although this is usually factored in to the total loan amount

The lender then evaluates the applicant/s for eligibility and capacity to repay and begins to verify all the information provided with your application

STAGE 3 ~

Once the lender is satisfied you will receive a pre approval for the home loan, which will outline the major terms and conditions of the loan, the loan amount and the length of time for which the pre-approval will remain valid.

STAGE 4 ~

You are now in a position to find the property you would like and to place an offer on that property

– a word of advice since you are waiting for finance you must make sure that in making an offer to purchase a property The Contract of Sale is made SUBJECT TO FINANCE- this will protect you if your finance falls short of the purchase costs.

Forward a copy of the Contract for Sale to your broker STAGE 5 ~ Once your offer is accepted by the vendor (the seller) you will have a ‘cooling off ‘ period. This is the time to consider whether or not to proceed with the purchase and you may choose to have a property inspection carried out to ensure it is structurally sound. Your broker will assist you to arrange a building inspection The real estate agent you are dealing with will need the details of a conveyancer. Your broker can arrange to have your conveying done for you The property details will be given to the lender who will conduct a valuation of the property

Forward a copy of the Contract for Sale to your broker

STAGE 5 ~

Once your offer is accepted by the vendor (the seller) you will have a ‘cooling off ‘ period. This is the time to consider whether or not to proceed with the purchase and you may choose to have a property inspection carried out to ensure it is structurally sound.

Your broker will assist you to arrange a building inspection

The real estate agent you are dealing with will need the details of a conveyancer.

Your broker can arrange to have your conveying done for you

The property details will be given to the lender who will conduct a valuation of the property

STAGE 6 ~ Provided the lenders’ valuation is satisfactory you will receive a formal approval which must be signed by all borrowers to come into effect STAGE 7 ~ Once all the mortgage documents have been prepared you will be asked to sign them. They are then processed by the lender and by the conveyancer. STAGE 8 ~ Settlement CONGRATULATIONS!!

STAGE 6 ~

Provided the lenders’ valuation is satisfactory you will receive a formal approval which must be signed by all borrowers to come into effect

STAGE 7 ~

Once all the mortgage documents have been prepared you will be asked to sign them. They are then processed by the lender and by the conveyancer.

STAGE 8 ~

Settlement

CONGRATULATIONS!!

COSTS ASSOCIATED WITH PURCHASING A PROPERTY ~ It is crucial that you organise your finance prior to making any offer or bidding at auction You must ensure that you can cover the deposit if your offer is successful As well as your deposit, you should allow money for: - stamp duty charged by the state government ( www.revenue.sa.gov.au) - loan application and other borrowing costs - lands title transfer fee and mortgage registration fee - council rates, water, power or gas charges - body corporate fees if the property is an apartment or unit - legal and conveyancing costs - building inspection fees - home and contents insurance

COSTS ASSOCIATED WITH PURCHASING A PROPERTY ~

It is crucial that you organise your finance prior to making any offer or bidding at auction

You must ensure that you can cover the deposit if your offer is successful

As well as your deposit, you should allow money for:

- stamp duty charged by the state government ( www.revenue.sa.gov.au) - loan application and other borrowing costs - lands title transfer fee and mortgage registration fee - council rates, water, power or gas charges - body corporate fees if the property is an apartment or unit - legal and conveyancing costs - building inspection fees - home and contents insurance