How Long Do Home Loan Approvals Take?

By Deltos Finance on November 24, 2023
A mortgage broker in a meeting with a housebuyer applying for a home loan

Besides asking about the number of bedrooms or what their potential neighbours are like, prospective homeowners also often ask, “How long do home loan approvals take?” This blog aims to shed light on this question, providing clear insights into the mortgage approval process in Australia. We’ll highlight key factors that might influence the timeline and offer several tips for achieving fast loan approval. 

The Home Loan Approval Timeline

How long does a mortgage loan approval take? Generally, the approval process for a standard home loan can take anywhere from four to six weeks, from the application submission to settlement. This timeline can vary based on factors like the complexity of your loan and the lender you choose. If you’re seeking fast home loans, being well-prepared with all the crucial details & necessary documents is key.

The Pre-Approval Stage: A Crucial Step

Pre-approval is an essential step in the home loan process. It provides you with an estimate of how much you can borrow, accelerating the overall process. Typically, pre-approval can be obtained within one to three business days. During that time, lenders assess your financial situation to determine your borrowing capacity. Home loan pre-approval is valid only for a given period, which is typically three months, but some lenders may extend the validity to six months. If you don’t manage to find a property within the given time, you might have to apply for a home loan pre-approval again.

The Home Loan Application Process: What to Expect

Once you move past pre-approval, the next step is the formal application. For straightforward cases, where applicants provide all required documents promptly, the approval can come through in as little as three to five business days. However, more complex cases, such as loans involving Lenders Mortgage Insurance (LMI) or non-standard properties, might extend this period. 

Property Valuation and Its Impact on Approval Time

Property valuation is a critical component of the home loan process. It can influence the duration of the approval process depending on the length of time it takes for the property valuation to be completed. This step typically takes five to seven business days but can extend depending on the property’s accessibility for valuation. 

From Formal Approval to Settlement: Streamlining the Final Steps

Once the property valuation has been completed and you have received formal, unconditional approval for your home loan, the next phase is moving towards settlement. This process may take four to six weeks and involve several key steps, each playing a critical role in ensuring a smooth transition to owning your new property. 

  • Contract Signing and Settlement Negotiation: After your loan is formally approved, the next step is to sign the contract of sale. This is typically facilitated by your conveyancer, who will liaise with the vendor’s conveyancer to finalise the terms. It’s crucial to take your time during this phase, usually one to two days, to avoid rushing into the agreement.
  • Loan Offer Documentation: Concurrently, your lender will prepare the loan offer documents. This stage can vary in duration, typically ranging from two to seven days. During this period, be prepared to provide any additional or updated documents requested by the lender.
  • Final Steps Before Settlement: It’s important to stay in close contact with your mortgage broker and conveyancer in the final days leading up to settlement. They will guide you through the last-minute requirements and ensure everything is in place for a successful settlement.

Factors Influencing Home Loan Approval Time

Again, the answer to the question: “How long does home loan approval take?” isn’t always straightforward. The time it takes for your home loan to be formally approved can be influenced by a variety of factors. Understanding these can help you better prepare and potentially expedite the process:

  • Loan Complexity: More complex loans, such as those with guarantors and multiple borrowers or properties, can take longer to process.
  • Lender’s Mortgage Insurance (LMI): If your loan requires LMI (usually when borrowing more than 80% of the property value), this can add extra time for approval.
  • Type of Property: Unusual properties, like those in rural areas or unique buildings, may require more in-depth valuation, extending the approval time.
  • Financial Situation: Your income stability, debt-to-income ratio and credit history can impact the home loan approval timeline.
  • Employment Type: Self-employed individuals or those with non-standard employment may face longer approval times due to additional verification requirements.
  • Lender Practices: Different lenders have varying processing times. Some may offer faster approvals but could have higher interest rates or fees.

Tips for Efficient Loan Processing and Handling Delays

Want to navigate the home loan approval process more efficiently and handle any potential delays? Consider the following tips:

  • Ensure Complete Documentation: See if the required documents, such as identification, income verification & bank statements, are complete and up-to-date.
  • Apply for Pre-Approval: A pre-approval can give you a clear idea of your borrowing capacity and help speed up the final approval process.
  • Engage with a Mortgage Broker: The best mortgage brokers often have direct access to lenders and can help streamline the application process.
  • Respond Promptly: Be ready to provide any additional information or documents requested by the lender without delay.
  • Understand Lender’s Timeline: Each lender has its own processing time. Choose a lender that aligns with your timeline needs.
  • Stay Organised: Keep all your documents and correspondence in order so you can quickly reference them if needed.
  • Communicate with Your Broker: Regularly check in with your mortgage broker for updates and guidance on how to handle any delays.

Deltos Finance’s Approach to Efficient Loan Processing

We’ve already shared tips and insights into the topic: how long does it take for home loan approval to be completed? Now, it’s time to introduce you to what we do best.

At Deltos Finance, we understand that time is of the essence in your real estate journey. That’s why we’ve developed a streamlined, client-focused approach, ensuring that each step, from initial consultation to final approval, is handled with utmost efficiency and expertise. Our team of seasoned home loan brokers in Hobart brings years of experience across various types of home loans in Hobart, providing personalised guidance tailored to each client’s unique financial situation.

Our process begins with a thorough understanding of your goals and financial circumstances, enabling us to determine the most suitable lending path within 24 hours of our initial meeting. This rapid response time is a cornerstone of our service, reflecting our commitment to exceeding client expectations every time. 

In every interaction, Deltos Finance prioritises the client’s needs, doing the hard work behind the scenes to provide regular updates and clear guidance. Our approach is not just about speed. We also put a premium on quality outcomes, low rejection rates and high customer satisfaction. We believe in making the home loan process as effortless and transparent as possible. That way, you can focus on the excitement of buying a new home while we handle the complexities of loan approval.

Get in Touch with Us Today

Whether you’re a first-time homebuyer or looking to refinance, Deltos Finance is here to guide you every step of the way. Contact us today for expert mortgage assistance. We’re here to help you achieve a reasonably fast and seamless mortgage loan approval process.

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