Whether you are looking to take out a new mortgage, or refinance an existing mortgage, we understand it can be a daunting process, mostly because it is difficult to find the answers you are looking for.
Sure, you can google and find a lot of generic info around interest rates, loan features, enticing specials, but if it is difficult to find info on the nuts and bolts of the process. Look no further, Blackbox Finance has got your back!
Understanding the process is important to assist you with setting your mindset around how long it will take and what your part in that process is. If you are one of the smart ones, you will be using Blackbox as your trusted mortgage brokers and they handle the majority of the work for you! So, without hesitation, here is what the process looks like from start to finish. Keep in mind, no two loans are the same, however the following info will get you most of the way to understanding what is to come.
QUICK CHAT – Based on our experience, we can usually determine whether you are in the ballpark within about 15-20 questions. These questions centre around things like income, current debts, how much you are looking to borrow, your family structure and future plans. This step takes around 5-minutes.
FACT FIND – When you have made it through the quick chat, the fact find is basically an extended version of that. It should only take around 10-minutes, but it gives us all the info to determine how much you qualify for, who you qualify with, and where to find the best deals specific to your circumstances.
SUPPORTING DOCUMENTS – The fact find also tells us what documents we need from you. This may include things like payslips, ID, bank statements, rates notice, tax returns, contract of sale and a few others. This is usually the point where you may feel a little weak at the knees, sounds like a pain right? Wrong! Blackbox Finance has put a LOT OF WORK INTO MAKING THIS AS EASY AS POSSIBLE FOR YOU. Here’s a couple of examples:
- Bank statements – We have a service where you can login into a portal and within around 10-clicks, you can automatically send us EVERY statement we have asked for!
- ID – Pull them straight out of your wallet, take a photo with your phone and message them to us straight away!
- Tax returns – We connect directly with your accountant and source this info for you!
BANK/LOAN SELECTION – Once you have narrowed down what is important to you, which banks you do and do not like, we are able to start putting the paperwork together. That is right, WE DO ALL OF THE PAPERWORK.
SIGNING THE PAPERWORK – We separate all the pages you need to sign into one file, you can nail it in around 5-minutes! It is important to review all the paperwork we send you to ensure you are happy with all the details. Once you are happy, send us your signed pages, we collate with the original document and send final drafts back to you for your records.
SUBMITTING TO THE BANK – Once we have received your signed documents, we collate them with the supporting documents you have supplied and submit to the bank. Each bank will have what they call a “service level” or SLA. The SLA determine how quickly the bank can assess your application and is usually broken up into stages such as first pickup, valuation, conditional approval, assessment of additional info and formal approval. As a rule of thumb, the entire process should take no more than 4-6 weeks from start to finish. Naturally, we ALWAYS aim for it to be much shorter than this, however there are a number of factors that may slow the process down e.g. providing any additional info the bank has requested, the bank’s workload etc.
VALUATION – This is often an important part of the process because it can determine things like how much you can borrow, what interest rate and fees you are eligible for, how much deposit you require. We always tell our clients YOU ONLY GET ONE CHANCE AT A GOOD VALUATION. So be sure to make sure your property is in good order, lawns mowed, gardens weeded (or just throw fresh mulch over the top), house is clean and well presented. This step usually takes between 2-4 days fully completed.
CONDITIONAL APPROVAL – Once the valuation result has been returned, and provided the bank is happy with the info we have provided, you will move to conditional approval. Often at this point, the bank may request some additional information that was not provided upfront or that they have determined they require based on your circumstances. This step also gives us a good indication of whether we are headed in the right direction. Following the return of the valuation, this step usually takes between 2-4 days.
LMI APPROVAL – If you are borrowing over 80% of the property value, you will be required to pay LMI (lender’s mortgage insurance). This is literally an insurance policy that the bank takes out on you that ensures if everything goes pear shaped, the bank still gets their money (sucks we know). Because the insurer is insuring you, this means they want a say in the approval process also. So, after conditional, the bank will send your whole file off to their chosen insurer, who will also assess the application and provide their own approval or decline. If the LMI provider does not approve, your loan does NOT get approved by the bank. This step usually takes 2-3 days.
FORMAL APPROVAL – This used to be called “unconditional approval” but they have all stopped calling it that. We suspect because the word “unconditional” does not give the bank any wiggle room if they discover something they do not like. This process is generally carried out by a different assessor to the one that has assessed the previous steps. This is done so that they have a second set of eyes looking for any faults or errors. Generally, this step will take between 2-4 days.
ISSUING OF MORTGAGE CONTRACTS – Once you have achieved formal approval, the bank will instruct their solicitors to draw up “mortgage contracts”. These are the legally binding documents that detail the loan, the banks obligations, your rights, and obligations. These are mostly standard templates, with a few blanks for them to fill, so it is usually a quick process and you will receive these documents in the post generally within 2-3 days. Once you have signed everything, BE SURE TO RETURN THEM BY EXPRESS POST. That way we get them back to the solicitors ASAP and if anything goes wrong with the post, we can track your documents.
CHECKING OF CONTRACTS – The solicitors will generally take 2-days to check the documents you have returned to make sure you have signed in all the right places and have returned all the pages. At this point, you should also be looking to change your insurance policy to include:
- The name of the new bank as the mortgagee
- The new bank will nominate a minimum $ value the dwelling on the property needs to be insured for
- When these changes have been made, ask your insurer for a “certificate of currency” and we provide this to the solicitors.
SETTLEMENT -This is the term used when you take legal ownership of the property. If you are purchasing, the time frame for this will be detailed in your contract. If you are refinancing, it is generally determined between the new bank and the old. We often find this can be a source of delays, so we start focusing on this part of the process around conditional approval, so that we can ensure a smooth transition come the time.
AND THAT’S IT!!!! How simple was that! Making this process as smooth and as simple for you as we can is a major focus for us! We understand it is painful, it is unknown, it is a lot of paperwork, and it is boring…. Not for us! This is how we get our kicks, and we really do enjoy our jobs!
If you have not reviewed your loan in the last 2 years, there is a good chance there is a better deal out there for you, and we can determine that within the first 2-steps. Forget that awkward conversation with the boss about a pay rise, we can help you with that extra cash and all it will cost you is around 30-minutes of your time!
So why not call your trusted Gold Coast mortgage brokers, Blackbox Finance. Located in Palm Beach, and operating for 5-years, we know what is important to Gold Coasters, we work for you, not the banks!