How To Apply For A Home Loan
Everyone would like to own their own home but very few can afford to purchase their home outright which is where a home loan from a financial institution comes into play. Knowing what's involved can give you a much clearer picture of what you need to do when applying for a loan for your home.
Steps In Applying For A Home Loan
Once you have decided to take out a loan to purchase your home you will need to decide on the best type of loan for your situation and go through the various steps to secure it. These steps are:
- The assessment
- Conditional approval of the loan
- The security assessment
- The lenders mortgage insurance
- The formal approval of the loan
- The settlement process
The lender will need to determine that you can afford to repay the loan and will look into your credit history as well as take steps to confirm the information on your application is correct. If all is in order you will be granted a conditional approval and the lender will move on to the next step.
Progress Of A Home Loan
A home loan is usually granted a conditional approval while a valuer does a check on the property and any other assets that you intend to use as security for your loan. If everything checks out in your favour, the loan will be approved.
Once unconditionally approved, the lender will forward to you a Letter of Offer which you will need to read through very carefully. If you are satisfied with the content you need to sign it and return it to the lender.
When you have submitted your formal acceptance the lender will issue all the loan documentation which you should then give to your conveyancer. This is an important step so forward your documents as soon as you receive them. Your conveyancer will then liaise with the lender to ensure the documentation is in order.
When settlement day arrives, your lender will release the funds. Your first repayment is then required to be paid one month after the date of settlement.