What are the Stages of a Mortgage Application?

There are five stages to the mortgage application process. Each is outlined below.

Pre-Approval

This is the stage where you submit most of the loan documents, including application, financial documentation, payslips, etc. You haven’t yet found a home during this stage, meaning your loan is subject to a valuation. However, as long as your property meets the guidelines set by your lender, you should have no problem being approved for your loan. Pre-approval can last for three months, allowing you plenty of time to find a home. 

Property Valuation

Once you find a property, your lender will schedule an appointment with a valuator to inspect your property. This process can take a while for several reasons. For one, banks don’t always employ valuators, meaning you are reliant on the independent valuer’s schedule as to when they can inspect your property. Second, valuations must be done when the home is no longer occupied. You have to wait until the current homeowners move out for the valuation to occur.

Formal Approval

This is the most exciting stage of the process for many homebuyers. This is when your lender has gone through all your paperwork and the property valuation and has decided to approve your loan. They will issue you a formal letter, at which point you can go ahead and make an offer for your desired property. There may be some more back and forth between you and your lender, especially if you didn’t provide all the needed paperwork and documentation at the beginning. 

Offer Issued

After the bank formally approves your loan, they will send you a loan contract for you to sign. You can go through this contract with a solicitor or on your own. However, it is essential to remember that the faster you sign the contract, the sooner the final stage can start. 

Settlement

Settlement is the final stage of the mortgage application process. Once your lender has all the documents, including the loan contract, they will provide the funds. They will then call your solicitor or conveyancer to let them know that the loan is available to be used. Then they will book a settlement day, which is the end of the process when your new home is finally in your name. 

As you can see, the mortgage application process can take a while. At Mortgage House, we can speed up the application process by acting as a liaison between all the parties, ensuring all documents are current and completed correctly. We can even offer you a loan ourselves.