Need a home loan in a hurry? You could be in luck. Plenty of lenders are keen to crunch loan approval times at present – but there’s a lot borrowers can do to potentially speed up the process, too.
Finding a home to buy can take time, and when the right place comes along it can feel as though you need to sign the sale contract fast to stake your claim.
But from there you’re going to need a home loan, and that’s where timing becomes critical.
The good news for home loan applicants is that average turnaround times have reached new record speeds at some of the bigger banks, while processing periods for smaller lenders have also reduced, according to the latest Broker Pulse survey.
But don’t let that lull you into a sense of complacency.
It’s important to have your loan ready to go by settlement – usually six weeks after you’ve signed and exchanged contracts (however this period of time can potentially be negotiated with the seller).
Otherwise, if you don’t have finance sorted by settlement date, the seller may be able to charge interest and penalty fees.
So, there can be a lot riding on getting your home loan approved in a timely fashion.
The general rule for loan approval times
How soon your home loan can be arranged often varies between lenders.
Some lenders boldly claim that it can take as little as an hour.
But that’s not usually the case.
To try and play it safe, allow about four to six weeks from the time you submit an application to having the funds available.
But of course, if you require funds sooner than that, then it could be a matter of us helping you line up a lender with quicker turnaround times (and then having us hassle them a bit for good measure).
What’s usually more important, however, is that you focus on the home loan that matches your needs, rather than racing in for a mortgage that can be arranged in record time.
5 ways to help speed up the home loan process
Fortunately, borrowers can do plenty to try and speed up the loan process.
Here are five steps you can take to help keep application and approval times tight:
1. Talk to us first
We can explain your borrowing power, let you know how big a deposit you may need, and check if your finances are in the shape it takes to get the green light from lenders. We also have access to resources that estimate how long approval times currently are with potential lenders.
2. Get your paperwork together
Gather all the documents a lender is likely to ask for, including copies of payslips, birth certificates and other ID, plus bank account statements for the past 3-6 months. If you’re unsure, this is a step we can help you with!
3. Try and hold off on any major changes
Big life changes, such as starting a new job or business just before you apply for a loan, can leave lenders asking questions. Try to maintain your budget – your usual spending/saving patterns – and your current job, to avoid a ‘please explain’ from lenders, which could delay loan approval.
4. Double-check you’ve completed the application accurately
Any mistakes on your application form can see the paperwork returned to you for corrections, putting the brakes on the whole process. Once again, we can help minimise any potential discrepancies in your application.
5. Ask us about loan pre-approval
Waiting until you’ve paid a deposit to apply for a mortgage can be a high-stakes, high-stress strategy. Loan pre-approval is a way to help you speed up the loan application process while also potentially boosting your bargaining power with vendors.
Call us today for more tips on getting your loan across the line – we’d love to help you move into your new home sooner.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.