Home Loan Approval Process


Buying a home is an exciting period, and when it comes to the home loan process, hopeful borrowers are often anxious to know what will be the next step and the length of time it can take to receive an outcome. The bad news is that there is no one-size-fits-all answer. The good news, however, is that a clear application is key to keeping the approval time short.

The length of time it takes to obtain a response on your home loan application may vary. This timeframe varies from lender to lender. Although, there is usually a response within two days to two weeks, however, this may differ depending on different circumstances.

Each home loan application process will vary due to the different situation of each borrower. For a reasonably straightforward application, it’s 48 hours to final approval. However, depending on the complexity of the cases, it may take longer that.

There are a few aspects that will be assessed before the lender will offer conditional approval. This will include conducting a valuation of the property. Having a valuation that is acceptable to the lender and completed in advance could speed up the process.

With valuations, the aim is to support an application rather than to make or break it. Some factors can result in an application not being approved based on the valuation, like zoning, property size, or if the condition of the building is poor enough that major repairs would be needed before it could realise its market value.

The bank will also assess your capacity to repay the loan amount. Information regarding salary, monthly expenses and liabilities will be reviewed to ensure that the loan is not unsuitable for your situation.

Throughout the application process, there may be a bit of to-and-fro between the customer, the broker and the lender due to additional requests from the bank regarding further information during the application.

Your potential lender will make an overall judgement of you as a borrower, and the complexity of your financial history will impact how long this takes. With this in mind, it is important to be full and frank in disclosure from a borrower’s perspective. A big issue is non-disclosure of liabilities or adverse information on a credit history, whether it is included in documentation or not.

The home loan application process is quite complicated, and this is a significant reason why you would sit down with a reputable broker. A finance broker can explain all of this to you and ease you through the application process.

Following the submission of an application, your finance broker will keep in touch with you for any updates on the progress, and to notify you of the outcome. If your application is approved, your broker will also advise you of when to expect a formal letter of approval from your lender.

If you would like to know more about the home loan application process, feel free to get in contact with us.