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MyRate Education Centre
Loan Process
To help our customers understand the loan application process, we have outlined a step-by-step guide for each loan type below.
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Purchase Loan Process
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Purchase Loan Process
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1. Research
Make sure you shop around for rates – compare different lenders and loan products to make sure you select the right product for you.
2. Pre-approval
Get pre approval for the amount of money you would like to borrow – this generally lasts for three months. Having your loan pre-approved means that if you find a property you like you can move quickly. Some lenders, such as MyRate, will give approve your loan subject to a property valuation free of charge.
3. Documentation
- Pay slips
- Group certificate
- 100 points of I.D.
- If self employed: tax returns for the last 2 years, financials for the same period
- Savings: enough to cover the deposit, stamp duty and other government fees, conveyancing and legal costs.
4. Find your property
- Inspect properties to find the right one for you
- Hire a solicitor/conveyancer to check the contract, organise the pest inspections, strata checks etc.
Buying at auction:
- You will typically have to pay 10% deposit at the fall of the hammer if you win the auction, with no cooling off periods.
- Your deposit will be held in trust by the agent with any interest earned split between you and vendor at settlement.
Buying from making an offer:
- You may be asked to pay a 0.25% holding deposit if your offer is accepted. This is usually not refundable.
- You will then usually have a 5 day cooling off period, during which you can organise valuations, inspections and finalise your finance.
- Remember: The property will not be held exclusively for you until contracts are signed and exchanged, and a deposit (usually 5-10%) paid.
5. Always keep your lender informed
- Let your lender know what’s happening at all stages – the more information and documents you can provide them with, the faster they will be able to process your loan.
- Inform your lender of your solicitor's/conveyancer's, vendor’s, and real estate agent's contact details.
- If more than 30 days has passed since your pre-approval, you will need to supply your lender with:
- Up to date pay slips
- Up to date savings/credit card/loan statements
- Your updated assets/liabilities to confirm nothing has changed since pre-approval.
- Provide your lender with a copy of the contract of sale.
- First Home Owner Grant: If you are buying your first home, your lender will provide you with the forms to complete, or you can apply through your solicitor/conveyancer.
6. Valuation
Your lender will organise this once you have provided them with a copy of the contract of sale. If the property is currently tenanted, it may be difficult for the valuer to arrange access, so keep in mind that getting the valuation may take a little longer.
7. Formal approval
If all your documents have been received and processed and the valuation comes back positive then formal approval on your loan will be granted.
8. Loan documents
Your lender will instruct their solicitor to send the loan documents to you. You need to sign and return these. Your lender will then liaise with your solicitor/conveyancer until settlement. Your loan will usually settle around 30-42 days after signing a contract depending on your state and contract terms.
9. Settlement
Congratulations! Your account has been set up and you are ready to start making repayments.
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Refinance Loan Process
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Refinance Loan Process
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1. Research
Make sure you shop around for rates – compare different lenders and loan products to make sure you select the right product for you.
2. Pre-approval
Get pre approval for the amount of money you would like to borrow – this generally lasts for three months.
3. Documentation
- Pay slips
- Group certificate
- 100 points of I.D.
- If self employed: tax returns for the last 2 years, financials for the same period
- Savings: enough to cover the deposit, stamp duty and other government fees
- 6 months worth of statements on all loans to be refinanced and you will need to sign a discharge authority which your lender will provide to you.
- Rates notices – Council and water rates
4. Always keep your lender informed
- Let your lender know what’s happening at all stages – the more information and documents you can provide them with, the faster they will be able to process your loan.
5. Submission
- Once you have provided all necessary details your consultant will submit your application for approval subject to valuation (this takes 2 days).
6. Valuation
Your lender will organise this once you have the approval subject to valuation. If the property is currently tenanted, it may be difficult for the valuer to arrange access, so keep in mind that getting the valuation may take a little longer.
7. Formal approval
If all your documents have been received and processed and the valuation comes back positive then formal approval on your loan will be granted.
8. Loan documents
Your lender will instruct their solicitor to send the loan documents to you. You need to sign and return these. Your lender will then liaise with your solicitor/conveyancer until settlement.
9. Settlement
Congratulations! Your account has been set up and you are ready to start making repayments.
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Construction Loan Process
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Construction Loan Process
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Things are a little different for a construction loan. These are the steps to take after getting your finance pre-approved.
Go shopping and choose a builder
Once you have your finance secured, you can start looking for the land to purchase to build on, and start contacting builders. Most pre-approvals will last for 3 months, so you can take some time to ensure you find your perfect location.
Sites you may find useful:
Keep your lender up to date
Let your lender know that you have found the land, inform them of the agents name, your conveyancer's details, and any other parties involved.
You will also have to supply your lender with a signed copy of the contract of sale, a copy of the contract from your builder, and if more than a month has past since your pre-approval, you will also have to supply your most recent payslip.
Property valuation
Your lender will arrange for an independent valuer from their panel of approved valuation companies to visit your property.
Loan documents and progress payments
Your lender will then send you your loan documents to be signed and returned. They will then liaise with you and your solicitor during the construction period, and will release funds on receipt of each invoice from your builder (these are called draw down stages).
Tips:
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Be organised. Getting your documents for pre approval organised as soon as possible will help speed up the whole loan approval process.
How fast can I settle? Timing from the offer on the property through to settlement is at least 3 weeks as long as all your documents are in order and you have finance pre approved. |
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7. Valuations |
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