Mortgage Approval Process When Building a New Home
STEP 1: Initial interview
During your initial interview with a Resolve Home Loan Specialist, you’ll learn exactly what to expect from the buying and financing process. Your Home Loan Specialist will explain the key steps of the home loan application process, and by the time you leave, you’ll know precisely what information you’ll need to provide. Remember, construction finance is different from regular home finance, so even if you’ve bought a house before, this initial interview is key to the smooth approval of your loan (not to mention your peace of mind).
STEP 2: Application lodgement
After discussing your specific situation and your individual objectives with you, we’ll make a product recommendation from our panel of lenders. If you’re happy with it, we’ll then lodge a loan application on your behalf, ensuring all aspects of the application are fully — and appropriately — completed.
STEP 3: Pre-approval
The lender will assess your application and provide provisional approval on your loan, based on your current situation. This is known as ‘pre-approval’, and usually comes with a list of criteria that you must meet before the lender will formally approve your loan. As the pre-approval is based on your current financial situation, it’s important that you keep your financial circumstances consistent and stable until the purchase of your property goes through. Don’t, for example, take on any more credit commitments or change your place of employment.
STEP 4: Lodgement for formal approval
Before we can apply for formal approval of your loan, we need the plans and specifications of your new home. The plans can take several weeks for your builder to prepare, so we may require additional information from you during this time (e.g. current pay slips).
STEP 5: Formal approval
Once your mortgage provider decides to grant formal approval, they’ll send us your formal offer letter. We’ll review it to ensure everything is in order, then forward it to you, your builder, land agent and settlement agent. A few days later, you’ll receive your home loan documents which you will need to sign.
STEP 6: Pre-start
Once you have formal approval of your home loan, you’ll meet with your home builder to discuss the finishings of your home (e.g. colour selection) and any variations you want to make to the plans (e.g. upgrading appliances or adding power points).
Most builders require finance to be formally approved before holding your pre-start interview, so you need to estimate the cost of these finishings and variations, and factor them into your initial home loan application. That way, your home loan will cover everything.
STEP 7: Settlement
To legally transfer your new home into your name, you’ll need to use a settlement agency. If you’re in WA, we recommend you use Axiom Conveyancing. If you’re in Victoria, we recommend you use Principle Conveyancing.
Having appointed a conveyancer, you’ll then need to sign your Transfer of Land document and pay your deposit for the property.
STEP 8: Construction
You must provide your home builder with a copy of the settlement confirmation letter from your conveyancer otherwise they will not begin construction of your home. Note that Resolve Finance will make sure you get the right paperwork to the right people at the right time.
STEP 9: Key handover
You can move in and start enjoying your new home!
Still have questions about the mortgage approval process?
Enquire below to have one of our consultants call you back within 24 hours. They’ll walk you through the entire mortgage process, and answer any questions you may have.
