A Simple Guide to the Home Loan Process

Applying for finance can seem intimidating and complicated. Of course, once you engage Altus Financial, we can help you through every stage of the process, so you can get approval sooner.  In this post, we walk through eight key steps in the home loan process.

 

1. Assess your financial situation

Before borrowing money, it’s imperative that you have a complete understanding of your financial situation. At Altus, we’ll meet with you to discuss your financial situation, goals and objective and by doing so, we will calculate your borrowing power, work out repayments and help you understand any costs which may be involved in process.  We search through hundreds of home loans to find one that’s most suitable for your needs. 

 

2. Get pre-approved

The next step in the home loan process is to secure pre-approval for a loan. You’ll need a pre-approval letter if you want to place a serious offer on a property, so it’s wise to obtain pre-approval before you start viewing homes. This way, you won’t get excited about a property you’re not ready to make an offer on.

Put yourself in a solid negotiating position by working through the pre-approval process before you start looking.

 

3. Find your new home

With your pre-approval letter ready, it’s time to start looking for your new home. This is the step you’ve been waiting for, and with your financial situation assessed and your pre-approval letter ready, you’re in a great position. 

As you search, keep the terms of your loan firmly in mind. Remember it’s important to research before purchasing, check passed and current property prices in the area and gain an understanding of existing and planned infrastructure, such as public transport, school and shops.

 

4. Make an offer

When you’ve found a property that meets your needs and fits within your financial requirements, it’s time to make an offer. Keep in mind that a real estate agreement only becomes a legal commitment when you have a contract signed by both parties; the seller and the buyer. 

The contract of sale will outline the selling price and your commitment which can be unconditional or sometimes include a cooling off period. At Altus, we can introduce you to a solicitor/conveyancer to check the purchasing conditions, help you understand rates and taxes applicable and check for building approvals, while running any relevant searches. They will also take care of the settlement process including managing the funds exchange on the settlement day.

 

5. Pay a deposit and formalise the contract

A deposit is required once the contract has been signed by both parties. Since you don’t yet have access to borrowed funds, this deposit will be paid with funds from your savings or other monies. In many cases, the period between paying the deposit and settling the exchange is about six weeks. 

In the meantime, a valuation will be completed on the property to confirm that it is satisfactory security for your lender. Your Altus Loans and Finance Specialist will confirm with your lender that your pre-approval is still competitive and suitable for your requirements.

 

6. Complete documentation

Your lender will then issue mortgage documentation which details your loan agreement, any upfront and ongoing fees, interest rates, repayments and loan structure including offset and redraw facilities.

 

7. Settlement

Prior to settlement, your solicitor will work with your lender to ensure settlement is scheduled and will advise you of any funds you are required to provide to complete the purchase.

 

8. Ongoing relationship

Our relationship won’t end at settlement, we will stay in touch to ensure your loan continue to meet your needs now and in the future. 

Buying a home or investing in property is a big step toward financial security, but it’s not the only step. Here at Altus, we provide our clients with support through every step of their financial lives. To speak with our Loans and Finance Specialist about purchasing a first home, refinancing, debt consolidation, or any other financial concern, reach out to us. We’re here to help.