Congratulations, the home loan for your dream home has been approved. Shortly after you receive verbal confirmation of the loan approval you will receive an approval letter and the loan contract. Unfortunately at this stage there is still a couple of steps that need to be completed before we can move on to the settlement and moving into your new home.
- The letter of offer from the lender – you will receive a formal loan offer letter once the lender has approved the loan. This is an important legal document which sets out the conditions that apply to your loan, including the interest rate and term of the loan. You must read this document carefully and ensure that you understand and agree with the contents. If there is anything you do not understand or agree with, you should seek professional advice immediately.
- Lenders loan terms and conditions – attached to the letter of offer the lender will provide you with detailed loan terms and conditions. This is another important legal document as it sets out the obligations for you and the lender. Again you must read this document carefully and seek professional advice if you are unclear about any of the terms and conditions.
- Accepting the loan offer – If you are happy to proceed with the loan, you should arrange to sign and return the loan documents. Remember this is a legaly binding document, please ensure that you seek professional advice for anything you don’t understand before you sign any document.
- Once you have returned the signed documentation to the lender they will commence arranging for the mortgage to be taken over your property
- The mortgage is a legal mechanism which provides the lender with rights over your property (security) in the eventuality that you fail to meet your obiligations under the loan contract.
- Particularly is you fail to meet your loan repayments, the lend has an exhaustive process which they follow to ensure the repayment of the loan balance. Which includes as a last resort, the lender can selling your property to meet the loan obligation.
- The lender will liaise with your solicitor or conveyancer while arranging the mortgage.
- The process will typically include title searches to ensure that you are or will become the rightful owner of the property.
Once they steps have been completed we can move onto settlement of the property purchase and the big day of moving into your new home. The key points to remember at this stage of the process are:
- Read and review all the loan documents carefully
- If there is anything you do not understand consider getting independent legal advice
- Sign all the loan documents where indicated
- return them as soon as possible
Next time we will look at the final step in the process – Settlement.