Asking how long it takes to get a loan approved is like asking how long is a piece of string. Every application is unique, so the time between your first contact with your broker and approval can never be predetermined. There are, however, some things you can do to help hurry your application along.
Although very rare, same-day loan approvals are possible depending on the lender’s criteria, the complexity of the deal and turnaround time. In my experience, this has been possible when the client’s lending position is fairly straightforward in terms of employment, asset and liability position. Also, the process is quick if a valuation wasn’t required due to a low LVR and both parties were happy with the contract price.
If you’re not prepared, it could take up to a month. The most common reason for a delay is a lender’s turnaround time to assessment, especially when some lenders have competitive offerings and experience larger application volumes, but a lack of preparation can cause this delay to snowball even further. When there are such delays and then a lender must organise a valuation or request further information, this can lead to a lengthy process time.
A good finance broker will help you take all the necessary steps to ensure fast home loan approval, but there are simple ways you can help hurry the process along before your first meeting with your broker.
1.Disclose all information
To avoid back and forth requests, which can delay your application, ensure your lender has a thorough understanding of you as an applicant, including appropriate identification and details of your financial position.
Provide all the supporting and necessary documents upfront to your broker (when they ask for it), convey as much detail as possible in relation to your requirements and objectives and have good, current information on your financial position. The broker (and the bank) will need to not only have your full financial details but will also need to take reasonable steps to verify it.
I’ve seen loans declined because a borrower “forgot” to mention a personal loan or a credit card, and the lender found out by checking their credit file or their bank statements.
2.Provide all requested documentation
Gone are the days when lenders will take an applicant’s word on anything. It’s not unusual to require at least 2 forms of income verification, but the key issue in the current climate is verifying household expenditure.
Yes, lenders have benchmarks that they use BUT they still verify your expenditure (in most cases) to your personal bank account and credit card details.
Your broker should give you a detailed list of documents that are required, and this will be aligned to the policy of the lender that you are applying to. Some lenders need more verification than others. All require more than they used to.
The level of disclosure and verification is far greater now than at any time in the past, and the onus is on “proof” not “potential”.
3.Skip the valuation queue
Not all applications require a valuation, depending on the property and lending institution, and forgoing this step can save a considerable amount of time. You can also save time by having a valuation completed prior to your application, as long as it is accepted by your chosen lender – but check with your broker first.
Sometimes, your broker can order a valuation whilst putting together your application documents, which speeds up the process no end.