You’ve scrimped, you’ve saved, you’ve done the paperwork, and now comes the nervous wait – so exactly how long does it take to get a home loan approved?

Whether you’re a first home buyer or a seasoned savvy investor, dealing with finance to purchase property can be frustrating, intimidating and can leave you with an overwhelming sense of anxiety. After all, while saving for the deposit alone can be quite the arduous task in itself, the wait to find out whether a lending provider has approved your application or not can make you question whether it was all worth it. 

However, it’s never been more important to go property shopping with a pre-approval. If a lender pre-approves you for a loan, they will do so for a specific amount. In turn, this allows you to focus on house hunting for the properties you can afford. While this might provide a humbling reality check, it can also help to speed up the final home loan process when you eventually find your winner. It also means that if you’re bidding at an auction, you’ll have a maximum bid in mind. 

To apply for a pre-approval, you need to submit a completed mortgage application form along with the supporting documents that the bank asks for, such as photo identification, payslips, evidence of your deposit and savings history, and proof of any existing debt.

Ultimately, the time taken from submission to receiving a final answer from the bank can vary depending on the complexity of your situation. By applying through a mortgage broker instead, prospective buyers can save themselves value time and experience, with little to no hassle and have access to a wider pool of loan products. A good mortgage broker will also assess your entire financial situation and steer you in the right direction as a means to maximise your shot at getting pre-approved the first time.

While this all seems hassle free, exactly how long does it take to get a home loan approved? Let’s find out.

A Timeline Of The Home Loan Approval Process

As a general outline, it takes between four to six weeks to get approved for a home loan. This is based on the moment you submit your application, right through to reaching the settlement date on your property. Key influencing factors that can affect this timeline include the type of home loan you’ve applied for, your credit history, your job, the documents you’ve supplied, and even which state you live in.

If you’ve applied for a pre-approval for a home loan, most lending providers will get back to you with an answer within three to seven business days. Applicants who either work full time or part time, and who can easily provide proof of income, can usually expect a response within just three days depending on the lender. This lower hassle process also applies to those looking to borrow less than 80% of a property’s value. Most banks look favourably on a lower borrowing amount, as it can in turn make them a lower risk candidate.

In simple terms, the more complex your situation or the higher the risk associated with your mortgage application, the longer the lenders will take to process your application. Key factors that can blow out the turnaround time of a bank’s credit department assessing your application can include the following:

●       Requesting a loan that is more than 80% of a property’s value

●       Borrowing more than $2 million for a home loan

●       Applying for a home loan using a guarantor

●       Purchasing an ‘out of the box’ property such as one located in a rural area

●       Unusual employment situations such as a new job, contract work or self employed

●       Borrowing via a trust, company or a self managed superannuation fund

●       You identify as a non-resident who is either overseas, or on a temporary visa 

 While the above situations don’t necessarily increase your risk of getting declined, unique circumstances are when the help of a mortgage broker can prove to be invaluable. As they have strong relationships with the key decision-makers and understand how to present your application, using the right broker can mean that they mitigate the risks on your behalf. 

Many people are in a rush to buy a property that they have found, and have no choice but to go for a lender with a short turnaround, end up paying higher interest rates, or get locked into a loan product that may not be the best fit for them in the long term. It’s for this reason that it’s always a good idea to get a pre-approval before you start making offers in order to avoid any nasty surprises, and to minimise any potential delays.

Once you’ve found a property that you would like to buy, have made an offer that’s been accepted, and already have a pre-approval, the lending provider will set up a property valuation to ensure that it meets their lending requirements. 

This process depends on the nature of the property, your application, and if you’re borrowing less than 80% of it’s value. If the latter is the case, some lenders will simply go off your presented Contract Of Sale, while others will simply conduct a ‘kerbside valuation’ to ensure that there is indeed a property located at the address you’ve provided. If a full valuation is required, it could take as long as five to seven business days, depending on how quickly the vendor or real estate agent allows access into the property as well as how many properties are being valued at the same time. 

Once a valuation has been undertaken and you’ve been formally approved, you can sign the Contract Of Sale with help from your conveyancer. It’s at this stage you should negotiate the settlement date, which is usually set for four weeks after signing the Contract Of Sale, but can be sped up if negotiated properly. 

Thus, for those potential property owners who find themselves wondering how long does it take to get a home loan approved, it’s easy to understand how the process can quickly add up to anywhere between four and six weeks. In order to speed this up, the key is preparation, insider knowledge, and working with a reputable mortgage broker – but where do you find one?

Navigating The World Of Home Loans With The Professionals 

Getting preapproved for a home loan has long been regarded as stressful, frustrating and time consuming – but the good news is that it doesn’t have to be.

Since their inception in 2012, the team at Madd Loans have worked tirelessly in providing over 2000 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, owner George Samios takes great pride in making the loan process both fun, educational and stress free – and he has a swag of awards to prove it.

If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing mortgage solutions or a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.