What is the Loan Application Process?

When going through the loan application process with your broker, you’ll commonly come across five primary stages.

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Stage One

The first stage will be the initial appointment where you will go over your requirements, needs, objectives with your broker. In this appointment your borrowing capacity will be calculated, or you will be provided with a general indication of how much you are able to borrow, and what kind of government incentives or schemes might be available to you. In the initial appointment you will not be provided any specific advice, it is more of a general chat about your situation.

Stage Two

The second stage of the process is gathering your documents. These documents will be used to understand your overall financial position and to confirm the information you provided us in the initial appointment is correct. You will be able to leave this with your broker to come back to you with stage three.

Stage Three

In stage three your broker will provide you with a product comparison and information around how much you would need to contribute, as well as confirming your borrowing capacity. In this stage you will be told a few different options based on your scenario. For example, if you are looking into buying a unit this will be very different to buying a house as you will be required to pay strata, body corporate, and other associated costs.

In this stage will be workshopping your scenario, going through to understand what you want to do and how you want to do it. If you are looking to refinance, it will generally be a case of discussing different products and going through which product will suit your requirements better. For example, one might have an offset account, and one might have a redraw, so it is a case of weighing up the pros and cons of each product.

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Stage Four

Stage four is used to determine a product and you let your broker know which bank you want to use. At this stage, your broker will put together a credit proposal. A credit proposal is a document that outlines your current position and then your future position once you have taken on board the loan. It will generally state your assets, your existing liabilities, your current income, but also go into things like your proposed repayments with the new loan, what you can expect to contribute towards the purchase and generally just outline everything based on that current day that the credit proposal is generated. Your credit proposal will last for approximately 90 days. Once the credit proposal has been generated, you will be in a position where you should apply as soon as possible.

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Stage Five

The final stage is where your broker will put together your lender application and we will send it out to you so you can lodge that application. You will receive an E-sign, or you'll receive some paper documents. Once you've signed that and provided that back to your broker, we can then lodge your home loan application with the bank. At that point in time, you've come, you've finalised the application process and you're now in the credit queue. Once you have reached the credit queue, we work with the lender and yourself to understand how we can get the loan to be approved, or hopefully, we just get the loan approved straight away and there's no questions asked from the bank.

From here, we move into the settlement process.

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