The time it takes to get approved for a home loan can be a source of anxiety for many individuals. People want to know as soon as possible whether or not they've been approved for their mortgage. So, how long does it actually take to get a home loan approved? And is there any way to speed up the process?
Generally, the full approval for a home loan can take anywhere from a few business days to several weeks, depending on the lender. In the best-case scenario, where both the borrower and lender are highly organized, the approval can be obtained within three to seven business days.
Although there are some factors that can help expedite the process, such as the lender's efficiency in processing applications, the timeline ultimately depends on the lender's internal procedures. The good news is that many lenders have embraced digital technology, which has accelerated the home loan application process. Although physical visits to the branch are no longer necessary, the application still needs to be reviewed and assessed by the lender, which can take varying amounts of time.
So, how long does the approval process typically take? Assuming that you have already conducted a thorough financial assessment, organized your financial affairs (including debt repayment, savings accumulation, and credit score improvement), the timeline for home loan approval can be as follows:
1. Comparing and choosing the ideal home loan: 1-7 days
2. Gathering necessary documents (passport, bank statements): A few hours to several days
3. Filling out the application form: 15 minutes to a few hours
4. Pre-approval confirmation: 15 minutes to several days
5. Valuation by the lender after finding a suitable property: 1-3 business days
6. Full home loan approval following valuation: 1-7 days
7. Settlement: Approximately 4 weeks
As you can see, the time taken for full home loan approval can vary significantly, depending on factors such as individual preparedness, the lender's application process, and the timeline for property valuation.
Is obtaining pre-approval beneficial in expediting the home loan approval process? One option to consider is seeking pre-approval before applying for the actual home loan. Online applications for pre-approval tend to be processed more quickly. Certain lenders claim to provide pre-approval within just 15 minutes through online applications. If your preferred lender offers this option, you can submit your application online or via phone. While you still need to meet the lender's specific requirements, the assessment process is generally streamlined for online applications as documents are scanned and analyzed promptly.
Pre-approval can serve as a guideline for determining your borrowing capacity and the amount you can afford to spend on a home. It allows you to participate in auctions and plan your purchase accordingly. Typically, pre-approval remains valid for 2-3 months, considering that your financial circumstances may change, as well as the dynamics of the home loan market.
However, it's important to note that pre-approval does not guarantee full loan approval. You will still be required to complete a comprehensive application with your lender. As the lender would have already received much of your documentation during the pre-approval stage, the process of obtaining full approval can be faster. If you have a good credit score and history, the lender may require minimal additional information from you.
Receiving pre-approval does not ensure you will get full mortgage approval, as your circumstances may change or the lending criteria may tighten during the intervening period.
Is same-day home loan approval possible? Any lender claiming to provide same-day home loan approval is likely referring to pre-approval or conditional approval. The process of obtaining full home loan approval typically takes a few weeks or longer due to the lender's comprehensive checks, as mentioned earlier.
Even the duration of pre-approval can vary according to the lender and their specific requirements. You can potentially expedite the pre-approval process by preparing all necessary information, such as your income details, other outstanding debts, and available savings, along with the relevant documents to support these.
To streamline the home loan application process, it may be beneficial to compile a checklist of the requirements, which may include proof of identity, proof of Australian citizenship or permanent residency, proof of income, proof of savings, and details of the intended property.
If the home loan application process seems overwhelming, consider seeking assistance from a qualified broker in your area. Mortgage brokers can guide you through the application process and offer recommendations for competitive home loans
Comments