ARTICLE AT A GLANCE
Applying for a home or investment loan doesn’t need to be daunting. At NBS Home Loans, we will do everything we can to make the process as smooth as possible.
We’ve written a comprehensive guide to the entire process, so you know what to expect every step of the way.
- The Initiation Discussion with a Finance Broker
- Your Home Loan Fact Find
- Your Home Loan Product Recommendation
- Your Home Loan Application
- Your Home Loan Application Assessment
- Your Home Loan Application Outcome
- Your Home Loan Settlement
- Your Home Loan Settlement Follow-Up
Before You Start With A Finance Broker?
Choosing a finance broker is an important step. The truth is that many brokers have access to similar rates and products, but all have different levels of experience and different areas of expertise.
The trick is to find someone you trust and enjoy working with, someone who is accredited with a wide range of lenders and can give you a comprehensive comparison of the market.
You also need someone with enough experience to know which lenders just aren’t going to be a fit for your circumstances no matter how great their rate is.
At NBS Home Loans, we have over 20 years of experience in lending and can compare a range of hundreds of loans from over 40 lenders to find the right fit for your needs and circumstances.
STEP 1: The Initial Discussion With A Finance Broker
When you decide to apply for a home or investment loan, refinance your existing loan, review your existing loan arrangements, or obtain pre-approval for a property purchase, the first step is to have an initial discussion with one of our brokers.
Depending on your preference, the first meeting can be done in person, over the phone, or via video.
Having an initial discussion is a great chance for you to get to know your broker and decide whether we’re a good fit for you.
At your first meeting, the broker will introduce themselves and obtain further details about your objectives, financial situation, and timeframes.
These questions are designed to help us determine whether we are able to assist you or if your enquiry would be better directed to another financial professional (for example, an accountant or financial planner).
We’ll also answer any questions you have about buying a home, the loan application process or home loans in general.
Questions About First Home Buyers And First Home Buyers Assistance Schemes
We’ll also answer any questions you have about buying a home, any home buyer assistance schemes you may be eligible for, the loan application process or home loans in general.
There are no silly questions, and we believe in being transparent at all times.
How Much Does It Cost To Engage A Finance Broker?
In most cases, there are no fees payable by you when engaging NBS Home Loans as your broker, as we will generally pay a commission by the lender when your loan settles.
However, there are some rare cases where a fee may be charged directly to you as the client.
Fees that can be charged can include when you are applying for bridging finance when the broker has advised you that you are unlikely to be approved for a loan, but you wish to proceed regardless, or other scenarios where we have a reasonable expectation that we will not be remunerated by a lender for our work in assisting you.
Any fees, if applicable, will be discussed during your initial meeting so you can decide if you want to proceed.
There is no charge for the initial meeting – so there won’t be any surprise costs!
Other brokers may have different fee structures, and they must disclose this to you upfront.
STEP 2: Home Loan Fact Find
Home Loan Client Questionnaire Deep Dive
After your initial discussion, we will then complete a detailed ‘fact find’.
Most people prefer to complete this online at their own pace, so we can provide you with access to our NBS Home Loans Client Centre Portal for you to complete online.
Others clients may prefer to complete the questionnaire in person, and we are also happy to arrange this.
The NBS Home Loans Client Fact Find Questionnaire will ask about:
- Personal details such as name, address, date of birth, citizenship, and whether you have any dependents
- What is important to you in a loan/lender
- Financial situation
- Assets and liabilities
- If you are a first home buyer
- Credit history
You will also need to provide supporting documents at this stage. These can be uploaded directly via our NBS Client Centre Portal if you complete the fact find online, or you can provide these documents directly to us if you are completing this step in person.
These documents generally include:
- Six (6) months of bank statements, credit card statements and mortgage statements, if applicable (we can make this easy by providing a link for you to upload them electronically directly from your online banking)
- At least your last two (2) payslips for PAYG employees or financials and tax returns for self-employed applicants
- Statements for any other liabilities or income you may have (e.g. child support income, HEC/HELP debt, rental income, Buy Now Pay Later facilities etc.)
- Evidence of your deposit and sufficient savings if you are buying a new property
- Other documents specific to your individual circumstances (we’ll let you know if this applies)
Completing this questionnaire and providing supporting documents will allow NBS Home Loans to understand your financial situation better and be able to provide you with credit advice.
If you are applying for a loan with a Guarantor, at this stage we will also need to meet with the Guarantor(s) and collect their personal and financial information as well as yours.
STEP 3: Home Loan Product Recommendation
Once NBS Home Loans has gathered all the required information via the “Fact Find”, we can then calculate your indicative borrowing capacity (i.e. how much you can afford to borrow) and recommend one or more suitable loan options based on your requirements.
We’ll clearly explain each loan’s costs, rates, and features to help you make an informed choice, and we’ll provide you with a report containing this information called the “NBS Home Loans Preliminary Assessment & Product Recommendation“.
We’ll also talk you through your next steps and any other information you may need to consider.
For example, if you are applying for a fixed rate loan, you may wish to consider paying a ‘fixed rate lock fee’ to lock in the current rate (in case it increases between application and settlement).
The Various First Home Buyer and Home Buyer Assistance Schemes in Australia
If you are purchasing a property, we’ll also check if you are eligible for any grants, stamp duty discounts or waivers, low deposit schemes, or other home buyer assistance schemes.
There are currently a number of State and Federally run schemes in place to assist eligible property purchasers, such as first home buyers, single parents, workers in specific fields, or those buying or building new homes.
Not all properties or buyers will be eligible for these schemes, but we will let you know and talk you through your options if you are eligible.
Once you have considered all your options and decided to proceed, we will then provide you with a report called a “Summary of Requirements & Credit Proposal”.
The “Summary of Requirements & Credit Proposal” details the chosen loan type, why it was chosen, the amount you will be applying for, a summary of other options that were considered, an estimate of fees and charges that will apply, and any commission NBS Home Loans (or other parties) expect to receive.
STEP 4: Home Loan Application
Once you have considered the “Summary of Requirements & Credit Proposal” and decided to proceed, the next step is the loan or pre-approval application.
Fortunately, NBS Home Loans will do all the hard work for you by completing the application on your behalf.
This is all done in-house by your broker and the NBS Home Loans Sydney-based admin team.
NBS Home Loans does not offshore or outsource our admin.
In most cases, NBS Home Loans will already have collected enough information and documentation throughout the process to be able to complete the application in full.
However, as each lender has slightly different requirements, your broker or our admin team will contact you if we need any additional information or documentation to complete the application.
Eligibility For First Home Buyers and First Home Buyer Assistance Schemes
If you are eligible for any home buyer assistance schemes, we will work closely with your conveyancer or solicitor to ensure any required paperwork is completed and submitted.
Once the application has been completed, it will be sent to you to check and sign (if required by the lender). It will then be submitted directly to the lender.
Refinancing An Existing Home Loan
If you are refinancing an existing loan, we will also help you complete a Mortgage Discharge Form to be provided to your existing lender at this stage.
The Mortgage Discharge Form form lets your existing lender know you intend to move the loan to a new lender and gives them sufficient notice to prepare all the required documentation to allow this to happen.
STEP 5: Home Loan Application Assessment
Once the home loan application has been submitted to the bank or lender, they will assess the application and make a decision about whether to approve it.
This home loan decision process usually takes around two to three weeks, but can take anywhere from a few days to a few months, depending on the complexity of the loan and your chosen lender’s processing times.
If the lender is happy with the application, they will usually first issue a conditional approval. This means that the loan is conditionally approved pending more information or documentation, such as the completion of a property valuation.
It is quite common for lenders to request further information or documentation during the assessment stage.
While NBS Home Loans provide as much information upfront as possible to comply with each lender’s policy, lenders can use their discretion to ask for further information at any point.
While the back and forth can sometimes seem a bit daunting, NBS Home Loans will walk you through any additional requirements so the requested information can be provided to the lender as soon as possible.
If you have applied for Lenders Mortgage Insurance (LMI – a type of insurance you may be required to hold depending on the size of your loan in relation to the value of your home), the application will also be assessed by the insurer at this stage.
A Note About Home Loan Pre-Approvals
Pre-approvals tend to have a much quicker turnaround time than full loan applications as most lenders do not ‘fully assess’ pre-approvals.
They will grant pre-approval up to a certain limit based on the information stated in the home loan application but usually do not fully check the applicant’s supporting documents or credit history.
This is why pre-approvals are a guide only and not a guarantee of approval.
If the lender is happy with your pre-approval application after application, they will issue a pre-approval letter, and you can then begin your property search in earnest.
However, it’s important to note that once you find a property, you will need to complete another application – in other words, you go back to step 4!
STEP 6: Home Loan Application Outcome
Once the application has been fully assessed and any outstanding information or documentation has been provided to the lender, you will be notified of the outcome of your application by either the lender or us, depending on each lender’s own approval process.
On the rare occasion that a loan is declined, we will walk you through the reason for the decline and outline your options and next steps.
Once your loan receives final approval, the lender will send you a loan offer containing details about the particulars of the loan and a loan contract for you to sign and return.
Many loan contracts can be signed digitally. However, some lenders do still require the contracts to be physically signed and witnessed.
You can seek legal advice before signing the contract if you wish to do so, and it’s important to complete and return it as soon as possible to avoid any delays at settlement.
You will also generally be asked to provide additional documents prior to settlement, including a copy of the building insurance on the property you are purchasing or refinancing.
Once Your Home Loan Is Approved
STEP 7: Home Loan Settlement
Once the home loan has been approved, the contracts have been signed, and all the relevant documents have been received by the lender, the next step is loan settlement.
If you are buying a new property, a settlement normally occurs 42 days after property contracts are exchanged or as otherwise negotiated with the vendor.
The settlement date is the date your loan will become active, the remaining funds for your property purchase will be paid to the vendor, and you will officially own your new property!
NBS Home Loans will work closely with your solicitor or conveyancer to ensure that settlement goes smoothly and the lender has everything they require well ahead of time.
Settlement When Refinancing An Existing Home Loan
If you are refinancing an existing loan, settlement can occur as soon as the incoming and outgoing lenders have received all required paperwork. This will be the day when the incoming lender pays out your loan with the outgoing lender, and your old loan will be closed off.
STEP 8: Home Loan Settlement Follow Up
At NBS Home Loans, our relationship continues long after your loan settles.
We will follow up with you to make sure everything is running smoothly with your new loan and will touch base with you regularly throughout the life of the loan to ensure you stay on a sharp rate and have the right fit for your changing circumstances.
We’ll also be here to answer any questions you may have at any time.
In addition to the information above, we’ve written an article with some helpful tips for borrowers feeling the pain of interest rate rises.
Click the link below to view.
With hundreds of loans from over 40 lenders and over 20 years of experience, NBS Home Loans take the hard work out of comparing loans to make sure you aren’t leaving any money on the table by missing out on other options.
For more information contact us today on 0434 103 326 to chat about the right home loan fit for your own circumstances.
For an up-to-date overview of the current rates on offer, visit our Facebook page at facebook.com/NBSHomeLoans