The Home Loan Application Process

Approved! The word every home purchaser wants to read or hear.

So how does one get from the point of wondering how much they can borrow, to the point where the lender confirms unconditional approval of the home loan?

• Instant approval?
• First contact
• Lending manager prepares
• Lending manager contacts borrower
• Appointment and interview
• Borrowing capacity
• Determining repayments
• Choosing a loan product
• The loan approval process

Instant approval?

Much of the advertising seen on TV, newspapers and mortgage websites suggests that a home loan can be approved immediately. Nonsense! The best that any lender can offer in terms if “instant approval” is approval subject to conditions. Pre-approval, conditional approval or approval in principle all mean the same thing – the loan is not approved.

When a lender gives approval with conditions, the lender is really telling the borrower that in ideal circumstances the loan would probably be approved. It is still necessary for the borrower to satisfy the lender (and possibly a mortgage insurer) that the borrower is a suitable candidate for a home loan.
It is most important that a borrower does not rely on conditional approval. Many an ill-informed and poorly advised purchaser has ended up in deep trouble after committing to a purchase, only to find that their loan application has been rejected.

If care is taken, and assistance is sought, the home loan approval process can become quite straight-forward.

First contact

When you make your first contact with Real Choice Mortgages, you will be asked for your name and a contact telephone number – that’s all.

Why don’t we ask for more than your name and contact number? Because we don’t want to waste your time, when time is so precious. You don’t want to answer a series of questions on your first contact call, only to have to repeat them to the personal lending manager when he or she calls.

Lending manager prepares

Our personal lending managers don’t man the telephones. They’re out there with clients, with bank representatives, attending product update seminars and so-on..

We take your details, then contact the personal lending manager who will be assisting you. Before contacting you, your personal lending manager will prepare. She will ensure that she is ready to answer your questions, provide you with some preliminary information, arrange a mutually acceptable appointment time and place, and to take notes regarding your requirements.

Lending manager contacts borrower

Having prepared for the first contact, the personal lending manager will contact you, discuss your needs, and arrange an appointment to meet with you.

Your personal lending manager will probably want to meet you at your home. (This makes sense, because the documents you will have to produce in order to satisfy lenders’ requirements will be at your home.)

Appointment and interview

Your personal lending manager has two roles at the interview. The first is ensure that all documentation required by a lender is available. For information as to the documents required for a successful loan application, see our section “How Do I Prepare?”.
The lending manager’s second role is that of “qualifier”. This involves checking through the documents you have provided to ensure that they will satisfy the requirements of various lenders. As you discuss your requirements with your lending manager, you will be asked questions about your employments, saving history, intended purposes etc.

Through this process of questioning, checking and confirming your personal lending manager is able to determine whether you will qualify for particular loan products according to the criteria set by the various lenders.

Borrowing capacity

The amount you are able to borrower will vary, depending on the lenders and their methods of calculating your ability to repay the loan.

Your personal lending manager will assist you to work out how much you can borrow from the various lenders. In the meantime, you can gain some idea as to your “borrowing power” by using our borrowing calculator.

Determining repayments

Because a home loan is a long-term commitment, requiring regular payments, the size of the repayments is an important factor in the choice of loan product.
Repayments are calculated as a minimum amount payable, but it is usually possible for a borrower to pay more than the minimum amount and to make payments more frequently in order to reduce the loan and the interest due. Your personal lending manager will assist you in calculating your repayments. However, in the meantime you can gain some idea as to your likely repayment commitments by using our repayments calculator.

Choosing a loan product

At this stage of the interview your personal lending manager will have determined which lenders can offer you the type of loan product you are looking for, and the extent to which you qualify for the loan product and amount you require.

You are now in a position to make your choice. See our section “How Do I Make My Choice?”

The loan approval process

Having made your choice of lender and loan product, you will be assisted by your personal lending manager in preparing the home loan application. Relevant forms will be completed, documents will be copied and attached, and declarations and statements will be executed to complete this stage of the process.
The loan application is then submitted by your personal lending manager, and the lender’s approval process will commence.

Click here for information on the Loan Approval Process.

Ready to talk home loans? 1300 139 284 Just ring us, and let us know your requirements. We will have one of our Personal Lending Managers make immediate contact with you to discuss your specific needs and the available options - Quick, Easy, Personal. You can also CLICK HERE to access our online form.