How Long Does Home Loan Approval Take?

Written by Mortgage Market Dec 15, 2017

Home loan approval varies from lender-to-lender and depends on a number of issues. These are as follows:

  • Whether or not your lender requires a valuation of the property to be carried out;
  • How complex your home loan is;
  • The number and quality of the documents that support your application; and
  • How quickly you sign your loan documents.

Of course, the home loan approval process has a number of stages, and each of these takes a certain amount of time. Let’s look at these stages in greater detail.

Home Loan Approval Stages

Stage 1 – Home Loan Pre-Approval

In some cases, lenders can provide you with preliminary home loan approval (pre-approval) within an hour or two of applying for your loan. But, this approval is usually subject to you meeting certain obligations that are specified.

Pre-approval basically lets you know that you meet the eligibility criteria of the lender and that you haven’t raised any red flags or reasons why you are not suitable for a loan. It is also important to note that preliminary or pre-approval is not binding and that you should not use this approval to then make an offer on a property.

Stage 2 – Home Loan Approval Subject to Buying

After you have gained pre-approval for a home loan you will then be asked to complete an application form and submit supporting documentation to prove that you are employed and that you are able to afford home loan repayments. Your application will then be processed and if approved you can then find a property to buy. This type of approval typically takes 3 working days and is called ‘conditional’ approval.

Stage 3 – Full Loan Approval

Full loan approval occurs when you find a property and your lender agrees to finance your home loan. This means that you can then make an offer on the property to buy it. Full approval typically takes up to 7 working days from the time of conditional approval. However, if the property you are seeking to buy is tenanted, then approval may take longer, especially if your lender wishes to have the property valued independently.

Basically, the more information you can supply to your lender about your current financial situation and the more documentation you have to support your claim, the quicker your home loan approval will be. If you allow 10 to14 working days for home loan approval, then this should give you sufficient time for your finance to be finalised. Just make sure you factor this time into your negotiations to buy a property and that you put ‘subject to finance approval’ in the conditions of any contract of sale that you sign, if you do not have full home loan approval. Otherwise, you may be forced to find finance from a less than reputable lender at a rate that is not affordable.

Do you want to know more about the home loan approval process? Then, contact us TODAY and find out how we can assist you.