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Understanding the loan process | KAM Lending Services

Understanding the loan process

Understanding the buying and loan process

Purchasing a new home or an investment property can be a daunting prospect, and you might find it difficult to identify the first logical step. Here we look at the process of securing a loan so you can buy the property that suits your needs and your budget.

Ask yourself what you want to achieve

The first step is to establish exactly what you are looking for. Do you want an investment property or a family home? If you are looking for an investment property, are you looking for a property you can fix up and “flip” or do you want something that is a low risk, long term prospect? Is your family home intended to be a starter home, or are you planning to live there for several decades?

Talk to your broker about your financial situation, so you can establish how much money you can borrow, and which loan is right for your needs. Ascertain which lender and loan is right for you.

Apply for a pre-approved loan

Arrange a pre-approved loan so you can have a clear idea of how much you can spend and how long it will take you to pay off the loan once you purchase the property. With a pre-approved loan, you will also stand out as a serious prospect, compared to other potential buyers who don’t have pre-approval.

Find your property

Once you have a vision for your property and you know your financial limits, you can start looking for your property. When you find something you like, investigate the location as well as checking out the floor plan and fixtures – research the local property prices, the potential capital growth, and see if the local council has any plans for the existing infrastructure that might affect the area in the future. Ask a registered valuer to make a full valuation of the property, so you can be sure you are getting a good deal.

Make an offer

When you are confident that you have found the property that suits your needs and your budget, you can make a written offer. If the seller accepts your offer, you can review the contract of sale with your solicitor or conveyancer, before signing it. Your solicitor or conveyancer will also take responsibility for any searches, and checking that all rates and taxes have been paid to date. The contract of sale confirms the selling price as well as terms and conditions. Your lender will usually require a property valuation, building inspection report and a pest inspection before giving you full loan approval.

Pay the deposit

Once you have exchanged contracts, you will need to pay the deposit, which works as your bond until settlement, which is usually six weeks after signing. You can cancel the contract during the cooling off period which is a specified period of time that varies from state to state.

Congratulations!

Now you are a home owner! Keep in regular contact with your lender, so you can ensure your home loan remains the best fit for your needs.

Contact us today if you wish to discuss your plans for owning a property. We can discuss the buying process and help with finding the right loan for you based on your financial situation and your individual needs.