Unconditional Home Loan Approval
Once you submit a home loan application, it will move through several stages before your lender gives you the go-ahead to purchase.
Once you submit a home loan application, it will move through several stages before your lender gives you the go-ahead to purchase.
Your home loan application will progress through various stages before you get approval.
You may be given ‘conditional approval’ at an early stage of the process, which means the lender has approved your loan if you meet certain additional requirements. These may include paying off an existing debt or selling another home.
The next step, called ‘unconditional approval’, is the lender’s final decision to approve you for the loan. This means they have taken all of your details into account and are happy to lend you a set amount of money to buy a specific property.
The terms unconditional, formal, and full are used interchangeably to describe the same thing.
Another term for unconditional approval is ‘formal approval,’ as well as ‘full approval.’ All three terms mean the same thing: the bank has everything it needs to make a final decision, and they’re willing to lend you the money.
At this point in the loan process, you do not have to accept the lender’s offer. However, if you are happy to proceed with the lender’s offer, all that is left to do is for you to read and sign the loan paperwork. You’re local My LMI Group broker can explain anything you do not understand or are unsure about in the loan documents.
If you take out a loan to buy a house and borrow more than 80% of the value of the home, your lender may ask you to pay Lenders Mortgage Insurance. This is a type of insurance that protects the lender in case you can’t keep up with your repayments.
Lenders arrange LMI on behalf of borrowers, but it means that the lender’s application also needs to be approved by the LMI insurer. This is because the insurer is effectively wearing the lender’s risk.
You cannot be certain that an LMI insurer will approve you for a loan. Factors that the insurer may consider include: your credit record, your savings history, and the stability of your employment.
Once you’ve received your loan approval and the insurer’s stamp of approval, it won’t be long before you receive the keys to your new home!
To get started on your home loan application, contact your local My LMI Group broker who can help you with the paperwork and guide you through the next steps.
If you are just beginning the home buying process, then there is much to learn. One of the first steps in obtaining a home loan is to understand how the process works. We’ve cut through the jargon, so that you can better understand what you need to do.
Let our team of financial experts help you.
Book an appointment online with a My LMI Group broker today.
Browse our My LMI Group local finance brokers Australia wide.