How long does it take to get approved for a home loan?

Applying for a home loan can make anyone anxious, as understandably you’ll want to know as soon as possible whether or not you’ve been approved for your mortgage. So, how long does it take to get a home loan? And is there any way to speed up the process?

Typically, getting full home loan approval can take anywhere from a few business days to several weeks, depending on the lender. Generally speaking, the fastest you could receive full approval (if you and your lender were incredibly organised) would be at least three to seven business days.

While there are a few things that can speed up home loan approval, it ultimately boils down to the lender’s timeline for processing your application. 

The good news is that over the years, lenders have begun fast-tracking the home loan application process by adopting more digital measures. While you no longer have to go into a branch and meet the lender to apply, your application still needs to be vetted by the lender, which can take a few days or a few weeks. 

How long does home loan approval take? The home loan approval timeline

Assuming that you have already performed a full financial health check on yourself and worked to get your affairs in order before you apply (including paying off your debts, growing genuine savings, boosting your credit score etc.), this is how long the home loan approval process can take. 

• Compare your options to find your ideal home loan - 1-7 days
• Gather your documents (passport, bank statements) - a few hours - several days
• Fill out your application - 15 minutes - a few hours
• Pre-approval confirmation - 15 minutes - several days
• Lender valuation after you find your home - 1-3 business days
• Full home loan approval - 1-7 days from valuation
• Settlement - around 4 weeks

As you can see, the actual process of getting full home loan approval can vary from several days to several weeks, depending on how organised you are, the lender’s application process, as well as the valuation timeline. 

Does pre-approval help you get approved for a home loan faster?

One option to consider if you’re hoping to speed-run your home loan application is to consider getting pre-approval first. If you opt for an online application, the speed at which your application is assessed is much faster. In fact, some lenders advertised online pre-approval in 15 minutes.

If your ideal lender offers this option, you may apply either over the phone or by submitting an online form. You will still need to meet a bank or lender’s conditions, but the process of assessing your application is generally more streamlined. Online application processes scan your documents and read your application immediately. 

You may then use your pre-approval as a gauge of how much you can afford to borrow and spend on a home, and begin bidding at auctions and planning your purchase. Pre-approval typically lasts around 2-3 months, as your personal financial circumstances may change in this time (for good or bad), as well as the home loan market itself.

However, pre-approval does not equal full loan approval, and you will still need to return to your lender to fill out a thorough application. The lender will already have a lot of your documentation and you may be more familiar with the process, so getting full-approval can be faster. If you have a good credit score and positive credit history, the lender may not need much information from you.

Just because you received pre-approval does not guarantee that you will receive full mortgage approval. Your circumstances may have changed or the market may be tighter.

Can you get a same-day home loan approval?

Any lender offering you a same-day home loan approval is usually talking about a pre-approval or conditional approval. This is because getting a home loan approved can take a few weeks or even longer because of the lender’s checks, as mentioned above.  

Even a pre-approval timeline is not fixed and varies depending on the lender and what checks they do. You may be able to get a quick home loan pre-approval by ensuring you have the necessary information at the ready. This includes information regarding your earnings, other debts, and available savings along with the documents to prove the same. 

On your part, you can make it easier for both you and the lender by preparing a checklist of the home loan application requirements, which will probably include:

• Proof of identity
• Proof of Australian citizenship or permanent residency
• Proof of income, with income tax returns and assessment forms preferred
• Proof of savings, with bank account statements preferred
• Details of the home you’re planning to buy and its location

Consider requesting a free copy of your credit report when preparing to apply for a home loan. This can tell you if there are any issues you need to sort out that may delay your mortgage approval, such as an outstanding credit card bill. 

If the process of applying for a home loan is overwhelming, then it may be worth getting some assistance from a qualified broker in your area. Mortgage brokers can guide you through the application process, as well as offer you recommendations for competitive home loans. 

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