For most Australians, getting a home loan is a necessary first step to getting on the property ladder. Yet submitting a home loan can be an intimidating and nerve-wracking prospect. No-one likes to be kept waiting, so at some stage you’ll probably find yourself wondering ‘how long does home loan approval take, anyway?’
The simple truth is that every loan (and every lender) is unique, so there’s no hard and fast answer to this question. If you come well-prepared and present a compelling case, your home loan may be approved in as little as three to five business days. Most cases are more complex though, and it takes a lot longer to seek approval.
At Time Home Loans, talking home loans is what we do, whether you’re a first home buyer or looking at purchasing a new investment property. As home loan brokers, we want to ensure you get the best deal possible for your situation. We break complicated subjects like home finance down into simple, easy-to-understand concepts as we walk you through our solutions.
Here’s the Time Home Loans guide to the circumstances that influence your home loan approval as well as the answer to the question: ‘how long does home loan approval take?’
Factors that influence home loan approval
The question of ‘how long does home loan approval take?’ involves several different considerations. Some of the most relevant include:
Documentation
If you have accurate complete versions of all the necessary documents, your home loan will usually be approved faster. Missing or inaccurate paperwork can slow the process down a lot.
Lender’s internal processes
Some lenders have a longer home loan approval process or more applications to get through.
The type of property
The kind of property you purchase has its own effects on the approval timeframe. For example, properties in rural and other less developed areas can require more detailed checks.
Financial factors
If you have extenuating circumstances that make your finances a little more complex e.g. self-employment or multiple income streams, this means more information for your lender to verify and likely delays in your process.
General timeframes
So how long does home loan approval take?
Although the process of a home loan approval is a variable one, here are some basic guidelines for what to expect during the home loan process. These timeframes are examples only:
Pre-approval
Home loan pre-approval (or conditional approval) means a lender has agreed in principle to lending you money towards a house purchase but hasn’t progressed to final approval yet. This stage gives you an idea of how much money you can borrow from the bank and can take anywhere from a few hours to a few weeks, with four to seven business days a reasonable expectation. Getting a pre-approval on your home loan can make the rest of the process run a lot smoother.
Application submission
You’ll need to fill out the application your lender provides and include supporting documents. The most requested documents are payslips (tax returns and financial statements if self-employed), bank statements and statements of current debts. This process can take three to five business days, longer if you can’t produce all the required documents.
Property valuation
Depending on the lender, we may order a valuation prior to submission, or the lender may arrange the property valuation after submission, a process which can take around three to five business days.
Lender’s mortgage insurance
If you’ve borrowed more than 80% of the property price, you’ll need to pay for lender’s mortgage insurance (LMI). This amount is calculated after the valuation and for most added to the loan (capitalised). This does not take any additional time within the process.
Loan approval
Once your property valuation and credit check are complete and you’ve obtained LMI, your home loan will be approved. This is highly dependent on the lender and can be from a few hours after submission through to two weeks.
Find the right home loan with Time Home Loans
If you’re looking for a refreshingly simple solution for your home loan confusion, you’ve come to the right place. From answering questions like “how long does home loan approval take?” to finding a home loan solution that’s perfect for your needs, Time Home Loans can deliver.
A team of experienced home loan brokers and home finance experts, we can help you navigate the various home loan types and their pros and cons. We also stay on top of the new products that are emerging all the time. We can help you find out whether you’d benefit most from a variable, fixed, split rate, interest-only or other type of loan. We can help you find a loan that meets all your requirements, help you complete the paperwork, package it professionally with your supporting documentation and submit it to your lender of choice.
To find out more and to get started on your own home finance solutions, book an appointment with the team at Time Home Loans.