Getting all your ducks in a row

Deb Murphy
The Home Loan Process - the Aussie way !

Information in this post is of a general nature and may vary from Lender to Lender and State to State


1. DEPOSIT - Money doesn't grow on trees.
Before anything else you need a savings plan (or rich parents). Most Lenders want to see that you can be disciplined enough to save on a regular and consistent basis over at least 3 months.  Generally a minimum of 5% of the price you pay for the house is required.

Tip:  keep a separate account exclusively for a home deposit. Lenders love this!

If you are lucky enough to have parents that can help you get into your home using their property equity then some Lenders will allow your parents to use their property to secure your loan and in that case you do not need the 5% deposit

2. PRE-APPROVAL - Between you, me and the gatepost...
...I believe that this is the most important part of the process. If you are ridgy didge about buying a property then you need to have a chin wag with me (or your current Broker if you have one)

A Pre-Approval is basically the same as doing a formal application except you haven't found your dream home yet. The Broker will want to know everything about you;  your future goals, your income, bank balances, loans, assets etc. Don't be alarmed at  the amount of financial information the broker requests. He needs this to make informed choices for you.
This is where you will find out all the costs of buying and ensure that you are in a position to do so.
Costs can include: Government fees and duties, solicitors fees, Lenders Mortgage Insurance and so on.

Tip: Don't drag your feet - if the broker asks you to provide paperwork to backup your information - just do it. He won't ask for anything he doesn't need. Think of it as a puzzle - without all the information, the prospective lender won't see the full picture.

Most pre-approvals are valid for 90 days and are subject to a valuation of the property you want to buy.

Once you have your pre-approval you can hit the ground running. 

3. THE ONE - fair dinkum
You found it! - the house of your dreams. This is where you sign a purchase contract.

Tip: remember that a pre approval is subject to a valuation so you may need to put a  finance clause in the contract.  Most buyers put in a 14 day  finance clause however this can be negotiated.

Now you have your work cut out for you...

You will need to find a Conveyancer/Solicitor to have a look at your contract and organise the conveyancing and settlement of the property. These are the guys that you pay to do title searches etc. and they will work with you, the Broker, the Lender and Real Estate agent to make it happen.

Then give me ( or your broker)a buzz so that we can organise the valuation as per the pre-approval conditions.

Tip: In Queensland the buyer is liable for home insurance 24 hours after the contract is fully signed so you will need to get onto this quickly. Your Broker can usually refer you to someone for this also.

In most cases the purchase will also be subject to building and pest inspection so this is something for you to organize during the 14 day finance period.

Tip: if you are eligible for any state grants this can be organised through each states government website or, again,  your Broker can assist.

4. APPROVED! - It'll be right mate.
So.... assuming the Pest and Build is all good, The valuation is all good and the Insurance is sorted then you are half way there.
The finance should become unconditional and, with your consent, the Solicitor/Conveyancer will advise the Selling agent

A few days later you will receive your loan offer paperwork from the Bank.
You will need to have these signed in front of witness ( usually a JP or CDec)
and return them to the Bank. The sooner the better so that the documents can be checked and sent to the settlements department of the Bank

Once you have sent the documents back to the Bank your last responsibility is to make sure you get any money you have going towards the purchase to you solicitor ( they will give you instructions of how much a couple of days before settlement )

Now you can sit back and relax .......

This is where your Solicitor, the sellers' solicitor and the Bank shake hands ( so to speak ) and swap important bits of paper and cheques.
Your solicitor will then call you to say "congratulation" !

Now you run to the Real Estate and get your Keys

You have now achieved the 'Aussie Dream' !!

TIP: Have a box or special drawer to keep all your home purchase and Loan documents in as once the dust settles you will want to refer to these.

Your broker will stay in touch with you to ensure that the loans are set up correctly and to answer any questions you will have about the Loan etc.

And that's it a Nutshell

Want to know more or get a pre-approval? Talk to us.