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Have you ever wondered what it’s like to apply for a home loan through a mortgage broker? How does the process start? What’s involved? How does a broker work with you?
Applying for a home loan can be daunting, especially if you’re looking to buy your first home. So we’ve outlined what you can expect when you initiate your home loan journey with one of our experienced YBR brokers. Here are the steps involved:
1) Connecting with your broker
Firstly, you have to get the ball rolling by reaching out to your broker.
When you first get in touch with one of our Yellow Brick Road mortgage brokers, they’ll set up a time to meet with you just to get a basic understanding of your financial situation and goals. They’ll explain the process to you and request certain documents that you’ll need to compile to get the home loan application underway.
With over 120 branches nationwide, and our newly launched Y Home Loans, an online home loan application arm of Yellow Brick Road Home Loans, we have the resources and experience to help you on your home loan journey.
2) Evaluating your circumstances
After your initial contact with your broker, you will need to provide them with the necessary documentation and information to start building a list of home loan products suited to you.
Some examples of the information you will be asked to provide include:
- a history of pay slips;
- recent tax returns;
- your current employer and their contact details;
- Identity documents (e.g. passport or driver’s licence);
- a list of personal assets or liabilities.
These are just a few examples of the information a broker requires to be able to piece together your application.
Importantly, as a consumer, a broker has certain obligations to you during this process that it is worth highlighting:
- Your broker has an obligation to understand your financial needs and objectives before they can advise on suitable home loan products. This means they will need to spend time getting a clear picture of your expenses and general living costs. Expect to spend some time explaining your financial situation clearly.
- Brokers may also seek a privacy consent. This is important because it allows them to run a credit check without leaving a trace of that enquiry on your credit history. Brokers are trying to ensure that there are no forgotten financial liabilities which may jeopardise your loan application.
3) Choosing the right loan
After you’ve provided your broker with all the necessary documentation for your loan application, you will receive a list of recommendations in the form of a Credit Proposal Disclosure Document.
They will outline each of the options provided to you, and this is a great opportunity to ask any questions about the various products and features associated with each home loan.
A few things to keep in mind while trying to decide which option suits you best:
- Ensure the interest rate, fees and loan features are consistent with your expectations and requirements.
- Always ask your broker about the turnaround time associated with your home loan. Some lenders may be experiencing higher delays than other lenders. If you need a settlement as soon as possible, make sure you advise your broker!
4) Submitting your application
Once you decide which home loan you would like to apply for, your broker will handle the paperwork, file your application with your chosen lender and keep you updated as the application progresses.
There may be some back and forth between the lender and your broker but don’t worry, lenders are simply scrutinising your application and seeking supporting documentation from you, the borrower.
Your broker will handle this process for you and will look after the conversations with your lender.
5) The Lender’s decision
If everything goes according to plan, your loan will get approved. However, if things don’t go your way, your broker will continue to work with you on finding other options.
If your application is approved, there will normally be additional steps to follow through on. For example, you may be asked to:
- Sign mortgage and loan documents
- Arrange insurance
- Set up payment options with your lender
As always, your broker will help you throughout this process.
Once your application is approved, it’s time to settle on the purchase of your property.
It’s always recommended that you engage a solicitor or conveyancer to ensure that the settlement with your property’s seller goes smoothly. If you’re uncertain of who to reach out to, generally your broker will be able to guide you in the direction of reliable professionals.
7) Becoming a homeowner
Once everything is said and done, you’ll be a homeowner. Your lender will typically provide you with online access to stay up to date with your loan.
But remember, settlement of your loan is just the start of your mortgage journey. Active management of your loan can help you save thousands of dollars in the long term, so you may want to keep the dialogue with your broker open, as they can be instrumental in monitoring your home loan after settlement.
If you’re looking to start your mortgage journey, or you have a few questions about anything to do with home loans, chat to one of our experienced brokers today!