Once you have signed, completed and returned your home loan compliance and application documents, we will move through the final preparation stages of packaging your home loan application for submission to the bank.
This generally takes 1-2 days for us to complete our quality control checks, complete the preparation into the bank’s lodgment portal, and submit the application to the bank, along with all of the required support documents.
Once your application has been fully submitted to the bank, the application will go into the bank’s assessment queue. Initially, the application will be triaged to check that all of the initial documents are to hand in preparation for review by the assessor.
The timeline for assessment by an assessor once the application is lodged will vary depending on the bank’s current volumes and current turnaround times.
Sometimes, if the bank is running a particularly popular marketing campaign for new business, this can increase the demand for assessment with an increased number of applications being submitted to the bank. We generally like to say that the application will be picked up by an assessor, within 3-5 days of lodgment.
Once the application is with an assessor, the assessor will start to work through the application, to understand what the client is looking to achieve, review the support document provided, and revert back to the broker with any questions that they may have that will support the application process.
If the assessor feels that they have sufficient information to make a decision on the application during their first assessment, then they will respond to the broker with this feedback. More than often, however, the assessor will respond with a number of questions about the file or proposal that they will want clarification on, prior to making a decision.
Once the bank has approved your loan, they likely issue one of the following:
- Approval in Principle - a non-property specific approval, where you have the framework of the approval in place, and can move to confidently and actively look for your next home
- Conditional Approval - a property-specific approval, where you have the approval for a particular transaction, with a number of conditions to be met, prior to the Formal Approval being issued
- Formal Approval - A formal and unconditional finance offer by the bank, confirming an absolute commitment by the bank to your finance. The bank will now move to prepare and issue the loan contracts and mortgage documents for your review, signing and returning to the bank in preparation for settlement.
If the bank does not approve your application for finance, we will discuss in detail, the reason or reasons that we did not reach approval, and what can be done to overcome this issue.
This does not occur very often, but on the odd occasion it does, there is often a means of working through the highlighted issue, to resolve, and move forward with an amended application to get you to where you need to go.
Some of the documents within this Compliance and application pack, need to be either electronically or if preferred can be printed and wet signed.
The application documents, verification of identity documents where applicable, and any other documents that are submitted to the bank will need to be wet signed, and either emailed or posted back to us.
Compliance documents are a record of your personal information, including your income, employment, asset and liability information, and are a complete compilation and analysis of your financial position, within the context of what you are looking to achieve with the finance proposal. They represent the data and analysis of your information that we have completed under our license, and are held by our office as evidence of this analysis.
The application documents for the bank represent the information drawn from the compliance documents, in the format required for the specific bank that we are seeking finance from with your application. They may require a hand-signed application, which they will use as part of their Verification of Identity requirements, under the Anti Money Laundering Act, and the Know Your Customer (KYC) obligations.
If you have any other questions, please do not hesitate to reach out to your broker, or file manager, who will be pleased to assist with your enquires.
Clawback Information
What is it, acknowledgement, and how we can work together
The Mortgage Broking industry has many provisions for the protection of your interests – including Best Interest Duty legislation that prohibits us from writing you a loan that is considered unsuitable. We comply and take our license obligations very seriously, and work hard to ensure that your loan solution is the best possible fit for your unique situation and supports your goals and objectives – both now and into the future.
Legislation covering the industry also includes the provision of what is called ‘Claw Back’. Claw Back refers to a Lender recovering or ‘clawing back’ the commission paid to a Broker if the loan is related to is paid out (via a sale or paying down the loan in full) or if the loan is refinanced to another lender within 2 years of the loan being settled.
Did you know, that it takes on average approximately 12 hours of work, to get your home loan from application to settlement, and this assumes that there is no additional time to cover any unexpected delays, coordination, or unique policy or assessment requirements? If any of the latter occurs, the work required could more than double, which will not only require the time of your broker but also the team, to ensure that we achieve for you, exactly what we set out to achieve.
We understand that many factors come into play when it comes to the decision to sell a property, the thought to refinance your home loan or even a change in life circumstances, and we want to support you on that journey around your changing needs and objectives. What we ask, is that while we endeavor to review your lending with you annually, and more often as need be, we ask that you do come back to us for your new finance needs to ensure that we can support you through this process, particularly in the first two years, to avoid massive disruption to our small business and income.
That way we can effectively and potentially replace any lost commission, with the commission we receive for the new loan, which keeps everyone happy and enables us to keep you on board as a long term client. While the transaction is of course important, the longer-term relationship, supporting your changing finance needs, and asking you to refer others, are more important still.
Legislation covering the industry also includes the provision of what is called ‘Claw Back’. Claw Back refers to a Lender recovering or ‘clawing back’ the commission paid to a Broker if the loan is related to is paid out (via a sale or paying down the loan in full) or if the loan is refinanced to another lender within 2 years of the loan being settled.
Did you know, that it takes on average approximately 12 hours of work, to get your home loan from application to settlement, and this assumes that there is no additional time to cover any unexpected delays, coordination, or unique policy or assessment requirements? If any of the latter occurs, the work required could more than double, which will not only require the time of your broker but also the team, to ensure that we achieve for you, exactly what we set out to achieve.
We understand that many factors come into play when it comes to the decision to sell a property, the thought to refinance your home loan or even a change in life circumstances, and we want to support you on that journey around your changing needs and objectives. What we ask, is that while we endeavor to review your lending with you annually, and more often as need be, we ask that you do come back to us for your new finance needs to ensure that we can support you through this process, particularly in the first two years, to avoid massive disruption to our small business and income.
That way we can effectively and potentially replace any lost commission, with the commission we receive for the new loan, which keeps everyone happy and enables us to keep you on board as a long term client. While the transaction is of course important, the longer-term relationship, supporting your changing finance needs, and asking you to refer others, are more important still.
Fixed Rate Lock In:
Most banks offer a Fixed Rate Lock In option for Fixed Rate Home Loans only, whereby you can elect to lock in or ensure that the fixed-rate term and the related interest rate that you have applied for at application, is the rate that you get at settlement date.
While most banks ‘headline’ their two-year fixed rate as their flagship product, when you apply for a two-year fixed rate, you are applying for the product, rather than the rate. Fixed rate lock in, enables you to guarantee the rate you are applying for, for 90 days from formal approval.
Notable, that you can only fixed rate lock, once you have a property, so this would be an option for a refinance or purchase where the security property is already known, however, if the application is for an Approval In Principle and you are yet to find a property, you cannot lock the rate in until you have secured a property to purchase.
The fixed rate lock in differs from one bank to another and can range from $0 - $750 flat fee, or a percentage of the loan between 0.10% and 0.15%, and some examples are provided below for your reference. Please note with well over 40 lenders on panel, the list below is not exhaustive, and indicative. If you are interested in a fixed rate lock in, we will be happy to confirm what the fixed rate lock in cost would be for your specific loan and specific circumstances.
While most banks ‘headline’ their two-year fixed rate as their flagship product, when you apply for a two-year fixed rate, you are applying for the product, rather than the rate. Fixed rate lock in, enables you to guarantee the rate you are applying for, for 90 days from formal approval.
Notable, that you can only fixed rate lock, once you have a property, so this would be an option for a refinance or purchase where the security property is already known, however, if the application is for an Approval In Principle and you are yet to find a property, you cannot lock the rate in until you have secured a property to purchase.
The fixed rate lock in differs from one bank to another and can range from $0 - $750 flat fee, or a percentage of the loan between 0.10% and 0.15%, and some examples are provided below for your reference. Please note with well over 40 lenders on panel, the list below is not exhaustive, and indicative. If you are interested in a fixed rate lock in, we will be happy to confirm what the fixed rate lock in cost would be for your specific loan and specific circumstances.
What would an increase in interest rate look like, compared to the fee?
Financial Planning and Your New Loan
When reviewing your financial needs and providing tailored recommendations, we are committed to discussing the importance of regularly evaluating your financial planning and personal insurance requirements. A Financial Planner can assist you with various aspects of financial management, including Personal Insurance (Life, Income Protection, Total & Permanent Disability and Trauma), Superannuation, Retirement Planning, and Tax Strategies. These services aim to help safeguard you, your family, and your assets, while focusing on Wealth Creation and Retirement Planning.
We strongly recommend reviewing your insurance needs and being referred to a Financial Planner to gain a better understanding of how personal insurance policies work, including whether they are sufficient and accurately tailored to your current needs. Additionally, you may wish to consider reviewing your broader financial planning requirements, which include Superannuation, Retirement Planning, and Tax Minimising strategies.
Please contact us to indicate interest in referral to a financial planner, we shall be glad to facilitate an introduction to one of our trusted and independent advisors for further discussion.
We strongly recommend reviewing your insurance needs and being referred to a Financial Planner to gain a better understanding of how personal insurance policies work, including whether they are sufficient and accurately tailored to your current needs. Additionally, you may wish to consider reviewing your broader financial planning requirements, which include Superannuation, Retirement Planning, and Tax Minimising strategies.
Please contact us to indicate interest in referral to a financial planner, we shall be glad to facilitate an introduction to one of our trusted and independent advisors for further discussion.