Loan Application Process
Loan Application process
Let us help you navigate the winding road ahead and avoid any wrong turns in your loan journey!
Your great success is our mission! We expertly deal with the lender’s queries and requirements promptly while keeping you informed all the way.
Before shopping for a property, we highly recommend getting a Pre-Approval so that you have a direct indication of how much you can borrow from the lender (you don’t need a specific property in mind to obtain a Pre-Approval). Having a Pre-Approval helps in showing sellers that you are a serious, financially capable buyer.
We assess if you are ready to purchase (deposit/savings, income, credit history etc), and though you can start the loan application process any time, we help advise you when to apply and not submitting the Pre-Approval application too early.
Pre-Approval (also known as Conditional Approval/AIP – Approval in Principle)
- It is not a requirement for borrowers to get a Pre-approval.
- We highly recommend getting Pre-Approval as it gives you a clearer idea of your borrowing limit, which is important to know before making an offer on a property.
- Being Pre-Approved could also help speed up the approval process for your final home loan application.
Note that Pre-Approval means:
- Your loan has been approved in principle, but the lender needs more information such as Valuation of the property, fully signed Contract of Sale, recent payslips and other verifications that your financial situation has not changed.
- Though you don’t need specific property in mind to get a Pre-Approval, it generally expires after 90 days (may be extended provided your financial situation has not changed). If you have not found a property, you might need to reapply again.
- Pre-Approval does not guarantee that your loan will be Unconditionally Approved (such as due to changes in your financial situation or market conditions).
Proceeding from Pre-Approval to UNCONDITIONAL/FULL Approval may depend on the lender’s Valuation of the property. If the purchase price is excessively higher than the lender’s valuation of the property, it can affect your loan’s approval, or you may need to cover the difference.
Clauses/Special Conditions to consider for Contract of Sale
The following are some clauses that can be added to the Contract of Sale so that sale is Conditional:
- “Subject to Finance” – adding this clause in home purchase contracts gives the buyer the right to end a Contract of Sale if their finance rejected by the lender. The sale is Conditional on the buyer successfully obtaining finance. “Subject to Finance” gives you time to organise the loan and if the loan is not approved, then you can cancel/pull out of the contract (you have to notify the agent in writing on time, and they may require a letter from the lender that your finance was not approved).
- “Subject to Pest and Building Inspection” – The sale is Conditional on a satisfactory Pest and Building Inspection report in order to proceed.. You can then pull out of the Contract of Sale should there be unsatisfactory defects and pest issues with the property
- “Subject to Valuation” – general requirement attached to a Conditional Loan Approval. Mostly, the purchase price will be regarded as the new “Current Market Value” of the property and the valuation condition will be satisfied. However, if there is an issue with the purchase price being excessive, the lender might not let the Conditional Approval proceed to Full Approval.
Note that: Purchases at Auctions are Unconditional.
All loan process depends on the individual’s situation, and there are other critical issues to ensure smooth application approval, but generally they are as follows:
- (est 1-2 hours) Book a FREE appointment with us (in our office, online or your place of choice) so that we can:
During the Free Consultation:
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- We comprehensively evaluate your financial needs, situation and goals.
- We help evaluate your Documents that lenders require for loan approval.
- Assess your Assets & Liabilities, Deposit amount, Credit Score etc
- Estimate your Borrowing Power/Limit, Loan Serviceability and LVR (Loan to Valuation Ratio).
- Compare the top home loan deals from many different lenders to find the loans most suited and priced for your situation and needs.
- Clearly explain the Loan Types, Loan Features, fees, costs, terms and conditions.
- We then present the options and provide you with the personalised reports of home loan options so you can take your time to consider carefully.
- We also thoroughly analyse anything applicable to your specific situation, such as concessions for Stamp Duty, PPR or Off-the-plan concessions, the FHOG (First Home Owner Grant), FHGB (First Home Guarantee), FHG (Family Home Guarantee), Victorian Homebuyer Fund etc.
- We also thoroughly discuss with you other significant buying costs, such as your government Stamp Duty costs, any LMI (Lender’s Mortgage Insurance) if applicable, and your Conveyancing costs (to transfer the property by either Lawyer or Conveyancer of your choice.
- We evaluate all aspects to ensure your loan will be approved smoothly, including helping with rectifications for any bad Credit History/Score that may impact your application.
- We recommend that we help you in getting a Pre-Approval, so that prior to buying, you can have a direct indication from the lender of how much can be approved (your borrowing limit).
Proceeding with VIP Finance Australia:
- We will discuss and answer any questions via phone calls/emails/online/other face-to-face meetings until you are fully satisfied with your final loan choice
- Depending on what you require, we prepare either the PRE-APPROVAL or LOAN APPLICATION for you to sign. We submit the application and deal with the lender’s queries to ensure a smooth approval. (Note: Lenders will do a Credit Check).
- The lender will review your application.
- For Pre-Approval Application, if Conditionally Approved (meaning the loan is approved with conditions), the lender will provide us with PRE-APPROVAL /CONDITIONAL APPROVAL/ /AIP (APPROVAL IN PRINCIPLE) outlining the conditions.
- For property purchase, A LETTER OF UNCONDITIONAL (FULL) APPROVAL will be granted only after the lender completed a satisfactory VALUATION of the property and CREDIT CHECK, and verifications that your satisfactory financial situation has not changed. This letter will be a formal acknowledgement from the lender that your home loan application has been approved.
- Some of our additional services may include assisting in any applicable grants, schemes or Stamp Duty concessions and arranging the required insurance for your property.
- When your LOAN DOCUMENTS arrive, we’ll guide you in completing and signing it before lodging the documents, along with your building insurance documents.
- About a week before settlement, you’ll have a settlement inspection to make sure the property’s condition is as you expected.
- LOAN SETTLEMENT DATE (the date when the transfer of property occurs and the date you loan starts). 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 exchange documents directly.
- After Settlement, your lender will send you a letter confirming your loan details, repayment amount and dates. From this point, your lender takes over managing your loan and questions.
- Stay in Touch – You will always be our valued VIP customer. We will update you of any better deals/ loan options to make sure your home loan is the right solution for your needs in the future, assisting you with any changes to your existing loan.