After you lodge an application, what happens next — and how long does it take? There's no one-size-fits-all answer, but a solid application is the key to keeping approval times short.
Following the lodgement of a home loan application, hopeful borrowers are keen to know what happens next and how long it will take to receive the verdict. The amount of time can vary, but the better prepared your application, the faster things move.
An answer is usually received between two days and two weeks, depending on a range of factors. For a reasonably straightforward application it can be around 48 hours to final approval. Before offering conditional approval, your lender assesses your application and conducts a valuation of the property — having a valuation acceptable to the lender done in advance will expedite the process.
With valuations, the intention is to support an application rather than to make or break it. A few things can affect approval — zoning, property size, or whether the condition of the property is poor enough that major repairs would be required before it could realise its market value. The lender also assesses your capacity to repay, which is where accurate and complete information about your salary and liabilities matters most.
The credit review can involve some back-and-forth between you, your broker and the lender as further information is requested. Your lender makes an overall judgement of you as a borrower, and the complexity of your financial history affects how long this takes.
It's best to be full and frank in disclosure. The biggest red flag is non-disclosure of liabilities or adverse information on a credit history — whether or not it appears in your documentation.
The complexity of the process is a great reason to sit down with a reputable broker who can explain all of it to you. After submission, you can expect your broker to keep you updated on progress and notify you of the outcome. If approved, your broker will also advise when to expect a formal letter of approval from your lender.
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