4. Loan approval
We suggest you establish your maximum borrowing capacity before looking at home designs or blocks of land so you know exactly what you can afford. This will save you a lot of time and potential disappointment.
Have an open discussion with your bank to see how long this process will take, as it can differ from lender to lender. And don’t feel you need to stick with the bank you’re currently using. Instead, shop around for the best offer. This may take a little time but it could save you thousands of dollars in the long run. You can also use a Mortgage Broker for this process.
The pre-approval process usually starts with you completing a loan application, whereby you’ll disclose your income, expenditure, assets, and debts, and submitting it to a lender (which is typically a bank). When they advise your maximum borrowing figure, you can get started on the exciting part of choosing a home building company, a new home design, and finding the perfect block of land.
Once you’ve chosen your block of land and home design you’ll need to submit your loan application to the bank as they will want to confirm the amount you’re borrowing matches the value of the home and land. The block of land will need to be valued and the home build quote accessed, which can take anywhere from two to four weeks.
Once you’re formally approved for a loan, you can sign the contract of sale and complete settlement with the assistance of a property lawyer or conveyancer. Settlement dates may normally be around four weeks after signing a contract.