The Home Loan Process
With hundreds of options to choose from it’s easy to be confused when choosing the right home loan. Here’s a sample of the numerous product types you’re sure to come across:
Basic Home Loan
Basic variable rate loans are extremely popular due to their low interest rates. The trade-off with these types of products is that they are limited on features.
Standard Variable Rate Home Loans
Standard variable rate loans are known for their flexibility and features. Partly fixing, loan splits; offset, additional repayments and redraw are usually standard with this type of product.
Fixed Rate Home Loans
Fixed rate loans protect borrowers against interest rate rises for a given period of time although work against borrowers when rates fall. Fixed rate loans are popular amongst investors and homeowners that require a level of security when forward planning their repayments.
Split Home Loans
Split loans, sometimes referred to as combination or blended loans, allow borrowers to spilt their home loan into a partly fixed and variable portions. This provides borrowers with the flexibility of a variable rate product and added certainty of a fixed rate loan.
Equity Loans or Lines of Credit
Equity loans or lines of credit allow borrowers to unlock the equity in their properties for any worthwhile purpose such as renovating, investing, motor vehicles, children’s education, etc. These types of products provide a low cost option to other forms of personal lending with the flexibility of allowing interest to capitalise.
All in One Loans
All in one loans are everyday transaction accounts where salary and expenses are paid and withdrawn from the loan. The idea here is that by depositing your salary into your loan account and only withdrawing your living expenses as required, the interest charges are reduced. The trap with this type of product is that it requires a high level of discipline or borrowers could end up spending more than they should. To realise the same benefit whilst minimising the overspending risks…we recommend a variable rate product with a 100% offset facility.
Low-doc loans are a great solution where borrowers can afford the loan repayments but are unable to disclose full income details. Low-doc loans are popular amongst self-employed applicants or where they have an irregular income stream.
Non-conforming loans are designed to benefit borrowers who do not meet mainstream lenders’ credit rules. These types of loans are the perfect solution where a borrowers’ credit history may have been impaired due to a one-off situation such as divorce, failed business, illness, or temporary unemployment.
This is done at a time and place convenient to you, your home, workplace or our office. During the interview we will listen to you so we get a fully understanding of your current situation and what it is you want and expect.
Then a fact find document is completed to gather all the information and your goals and objectives.
Once the consultant has all the information required they then search for various options available to you. After researching many different lenders and loans we will come back to you with 3 options which best suit your current circumstances.
Once the most appropriate lender and loan product have been selected and you are satisfied and agree it is the right option for you, then the loan application process begins and a home loan application form is completed for that particular lender.
Your home loan application is returned to the office where it is processed and lodged with the bank within 24 hours of receipt of all the required supporting documentation.
Within 24 hours of us lodging the application with the bank of your choice we receive notification the application has been received and assessment has begun.
You will also receive notification from Lux Finance in the form of a personalised letter, that the loan application has been processed and forwarded to the bank, and laying out the steps of the process.
Once the application has been assessed by the bank and satisfies their criteria a conditional approval is issued subject to certain conditions eg. Valuation of the property and any outstanding matters requiring attention.
Immediately a conditional approval is issued the bank will order the valuation of your property. The licensed valuer will contact you to arrange a suitable time to assess your property.
Lux Finance will contact you by phone to inform you the loan has been conditionally approved and inform you if there are any requirements other than the valuation.
Once the bank receives the valuation report and all other conditions are met the bank can then proceed to Unconditional Approval, which means your loan is approved, the real estate and settlement agents are notified and the next step is for the lender to prepare the Mortgage Documents.
You will receive notification confirming Unconditional Approval by both phone and a personalised letter from Lux Finance
Once the loan has been unconditionally approved the bank instructs their solicitors to prepare your mortgage documents and forward them to you or a nominated party. You should receive these with in 7 to 10 days. When these documents have been signed and returned to the bank and are all in order a settlement date can be scheduled.
After the Mortgage Documents have been return and checked, the banks solicitors will book a settlement date where all the parties involved come together to effect settlement, this part of the process may vary if the loan is for a property purchase or a refinance.
As soon as the loan settles Lux Finance is notified in which case you will immediately be contacted by phone to inform you the loan has settled.
Lux Finance will then notify you by phone and with a personalised letter that the loans has settled also all your original documents will be returned.
Our service does not stop once settlement has occurred and we are available at any time to assist in your ongoing needs.