10 easy steps to applying for a home loan
The home loan application process can be daunting, but it doesn’t have to be. Follow our 10 easy steps to home loan application success.
Step 1: Meet with a Loan Market mortgage adviser
During the consultation process your Loan Market mortgage adviser will discuss your needs and help you select the most appropriate features and home loan rate. Read more here about what to expect from your first meeting with an adviser. Once the right loan is selected, the loan application process begins.
Most home loan applications will follow the same general process from initial interview to full approval. Depending on the complexity of your situation, this process may take anything from a few days to a couple of weeks, however as a guide, you should allow around 14 days for full approval and a further 2-3 weeks for settlement.
Step 2: Loan application process
Your Loan Market mortgage adviser will ensure you have all the necessary documentation for your home loan application, and will lodge it with your selected lender.
Documentation may include:
- Passport/Visa/Citizenship Certificate
- Drivers License
- Marriage Certificate
- Birth Certificate
- Your two most recent payslips
- Copy of employment contract and/or a letter from your employer
- Most recent IRB (Inland Revenue Business) Tax Statement
- If self-employed, the last two year’s full tax returns
- WINZ (Work and Income New Zealand) Statements
- Proof of existing rental income
- Proof of proposed rental income
- Most recent statement for all savings accounts
- Copy of share certificates etc.
- Copy of sale contact on existing home or settlement letter from your solicitor if the deposit it to come from the sale of an existing home
- Statutory declaration if any part of the deposit is a gift, stating it is non-repayable
- Rates notice on any existing properties
- Most recent statement for all credit cards, personal loans, leases etc
- Copy of loan statements for 6 months on any existing mortgages
- Copy of contract of sale for property being purchased
- Home Insurance certificate for all properties owned
- Copy of plans, specifications and fixed price contract for any construction
- Cheque for establishment fees if required
Step 3: Assessment
The lender will assess your application to determine whether you meet their serviceability requirements. This process includes confirmation of your income and employment and a credit reference check. Your supporting documentation is also assessed at this time.
Step 4: Conditional approval
Your Loan Market mortgage adviser will receive conditional approval, also known as pre-approval, on your behalf. The lender will also outline any matters that need to be addressed before they can issue an unconditional approval.
Conditional approval means you’ll have confidence in knowing how much you can spend and what your repayments will be. Having conditional approval also means you’ll be able to make an offer quickly when you find your dream home.
Step 5: Security assessment (Valuation reports)
During the security assessment the lender may require a valuation on the property being purchased. Valuations are at your own cost – your Loan Market mortgage adviser may be able to arrange a valuation on your behalf.
Step 6: Lenders Mortgage Insurance
If required, your lender will now submit your application for Lender’s Mortgage Insurance assessment.
Step 7: Unconditional (full) approval
You’ve made an offer on your dream home - congratulations! Once your home loan is unconditionally approved, a formal Letter of Offer will be issued by the lender. Once the offer has been accepted, you’re legally committed to going through with the sale.
Step 8: Loan settlement
Loan documentation is issued to your solicitor/conveyancer, who will then liaise with the lender to schedule a settlement date. The first repayment on your loan will usually be required one month after the settlement date.
Step 9: Insurance
There are two types of insurance you should consider:
- Life/income protection
- Home and contents insurance
You may need to start your insurance cover prior to settlement.
Step 10: Move in
Congratulations! You’ve bought your house - now it’s time to move in and get settled.