How long does it really take to get a home loan?

Need a home loan in a hurry? You could be in luck. Plenty of lenders are keen to crunch loan approval times at present – but there’s a lot borrowers can do to potentially speed up the process, too.

Finding a home to buy can take time, and when the right place comes along it can feel as though you need to sign the sale contract fast to stake your claim.

But from there you’re going to need a home loan, and that’s where timing becomes critical.

The good news for home loan applicants is that average turnaround times have reached new record speeds at some of the bigger banks, while processing periods for smaller lenders have also reduced, according to the latest Broker Pulse survey.

But don’t let that lull you into a sense of complacency.

It’s important to have your loan ready to go by settlement – usually six weeks after you’ve signed and exchanged contracts (however this period of time can potentially be negotiated with the seller).

Otherwise, if you don’t have finance sorted by settlement date, the seller may be able to charge interest and penalty fees.

So, there can be a lot riding on getting your home loan approved in a timely fashion.

The general rule for loan approval times

How soon your home loan can be arranged often varies between lenders.

Some lenders boldly claim that it can take as little as an hour.

But that’s not usually the case.

To try and play it safe, allow about four to six weeks from the time you submit an application to having the funds available.

But of course, if you require funds sooner than that, then it could be a matter of us helping you line up a lender with quicker turnaround times (and then having us hassle them a bit for good measure).

What’s usually more important, however, is that you focus on the home loan that matches your needs, rather than racing in for a mortgage that can be arranged in record time.

5 ways to help speed up the home loan process

Fortunately, borrowers can do plenty to try and speed up the loan process.

Here are five steps you can take to help keep application and approval times tight:

1. Talk to us first

We can explain your borrowing power, let you know how big a deposit you may need, and check if your finances are in the shape it takes to get the green light from lenders. We also have access to resources that estimate how long approval times currently are with potential lenders.

2. Get your paperwork together

Gather all the documents a lender is likely to ask for, including copies of payslips, birth certificates and other ID, plus bank account statements for the past 3-6 months. If you’re unsure, this is a step we can help you with!

3. Try and hold off on any major changes

Big life changes, such as starting a new job or business just before you apply for a loan, can leave lenders asking questions. Try to maintain your budget – your usual spending/saving patterns – and your current job, to avoid a ‘please explain’ from lenders, which could delay loan approval.

4. Double-check you’ve completed the application accurately

Any mistakes on your application form can see the paperwork returned to you for corrections, putting the brakes on the whole process. Once again, we can help minimise any potential discrepancies in your application.

5. Ask us about loan pre-approval

Waiting until you’ve paid a deposit to apply for a mortgage can be a high-stakes, high-stress strategy. Loan pre-approval is a way to help you speed up the loan application process while also potentially boosting your bargaining power with vendors.

Call us today for more tips on getting your loan across the line – we’d love to help you move into your new home sooner.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Where are the bargain homes located in your suburb?

Location may be a big driver of property prices, but in any given suburb a few streets can be all that separates paying top dollar for a home or potentially scoring a bargain. Here’s how to use a tool to find pockets of value in any given neighbourhood.

Each suburb has its own median house price, and sites like realestate.com.au can provide a useful guide to median values for a particular postcode.

However, the median is obviously only the middle point in each suburb’s dataset – and it’s common for prices to vary widely across a single suburb.

Fortunately, there is an easy online tool that can help you identify more affordable pockets in the suburbs you’re looking to buy in.

New interactive price tool

PropTrack has developed an interactive property price tool that reveals the median values across different parts of each suburb.

The price differences can be surprising.

For example in Beecroft, on Sydney’s leafy north shore, the median house price is about $2.4 million.

But as PropTrack’s price tool shows, in certain parts of Beecroft, the median rises to more than $2.8 million.

Yet, several streets away, that figure is closer to $2.2 million.

There is a reason for the $600,000 difference.

The more affordable parts of the neighbourhood lie adjacent to the M2 Hills Motorway.

It’s a similar story in Melbourne’s popular inner suburb of Fitzroy North.

Known for its character-filled terrace houses, Fitzroy North has a median house value of $1.6 million.

But if you want to live near Edinburgh Gardens – the suburb’s attractive parkland – be prepared to pay closer to $3 million.

In Brisbane’s Fortitude Valley, the trendy James Street Market side of James Street has a median house price of $3 million, whereas across the road towards Brunswick Street there’s a median house price of under $1.9 million.

These price differences are not unusual.

According to a PropTrack analysis, home buyers can typically save around $365,000 by buying in the more affordable areas of a suburb.

In some neighbourhoods though the price gap becomes more of a chasm.

In the Perth suburb of Subiaco, for instance, several pockets of homes have median values topping $2 million.

Head just around the corner to Subiaco Oval and the surrounding homes are priced closer to $840,000.

What to watch with bargain buys

By this stage you’ve probably noticed a trend.

Nearby features can have a real impact – good and bad – on surrounding property values.

Access to the beach, great views or a local park can push property values higher.

On the other hand, homes bordering a 6-lane highway or nearby industrial estate can offer bargain buying – as long as you’re prepared to live with whatever is keeping the price lower.

And then there may be not-so-obvious factors – such as flood zones or upcoming changes to council zoning – so it’s worth doing your research.

After all, there’s a lot you can do to renovate a home, but you can’t change the location.

Seizing opportunities

That said, pricing differences within suburbs can offer opportunities to save.

A single street can be all that separates an expensive home from its more affordable neighbour.

Buying in the cheaper neighbourhood lets you enjoy all the amenities of the more expensive postcode, without the higher price tag.

It’s also worth keeping tabs on any planned local developments that could have the potential to transform today’s ugly duckling pocket into tomorrow’s upmarket enclave.

Thinking of buying? Call us today to understand your borrowing power – it’ll help let you know where you can afford to buy.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Home buyers rejoice! More listings are hitting the market

Great news for home buyers! After an extended run of low listings, the number of homes coming onto the market is skyrocketing. So could this have an impact on the property market? Let’s take a look.

Take a look around your local suburb, and chances are you’ll see freshly minted For Sale signs popping up all over the place.

That’s because a large number of homes are coming onto the market.

Research firm PropTrack says the property market is off to a strong start for the year, with the number of new listings nationally on realestate.com.au up 12% year-on-year in January.

Melbourne and Sydney had their busiest January in over a decade.

Activity was also strong in Hobart, Brisbane and Adelaide, with Canberra experiencing its busiest-ever January for new listings.

Only Perth bucked the trend, recording slightly fewer new listings this year compared to January 2023.

Why the uptick in listings?

The rise in new listings reflects strong demand, very low unemployment and population growth.

Home buyers are also enjoying a more stable interest rate outlook.

February saw rates remain on hold, and PropTrack says financial markets are now expecting a reasonable chance that interest rates may start to fall later in the year.

What does more listings mean for home buyers?

More homes coming onto the market gives buyers the benefit of increased choice, and that’s a real plus if you are looking for your first home or upgrading to your next place.

But the rise in listings may not push home prices down.

That’s because we are still seeing plenty of keen buyers.

As a guide, CoreLogic estimates 115,241 homes were sold over the three months ending January 31 – an 11.9% increase on the same period last year, with high levels of migration being a big driver of demand.

CoreLogic adds that expectations of lower rates later this year could see house price growth accelerate.

How you can prepare

More choice can be a good thing for buyers. However, it can become easy to lose track of what you’re looking for in a property, especially if you’ve attended a large number of inspections.

That’s when it helps to draw up a list of must-have home features (such as aspect, block size or parking requirements) followed by nice-but-not-necessary features (like, say, a swimming pool or a shed) to assess each home you visit.

It also makes sense to be ready to act when you see a property you’d like to buy.

Having home loan pre-approval in place lets you set a buying budget, so you can focus on homes within your price range. It also means you can make an offer with confidence – and stay one step ahead of less-organised buyers.

Talk to us today to get your home loan ducks in a row and take advantage of a wider choice of homes listed for sale.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

They’re back! Why property investors account for one-in-three new home loans

Lending to property investors is soaring once again. We lift the lid on what’s driving investor interest – and what it could mean for the property market throughout 2024.

It looks like property investors are back … and in a big way.

The latest ABS figures show that in December 2023, banks lent over $26 billion in new home loans – and one-third of this figure, a whopping $9.5 billion, was to property investors.

That equates to 36.2% of all housing loans – the highest market share for property investors since mid-2017.

It’s also quite an uptick from December 2020, when the ABS says investors took out just 23.6% of mortgages.

So why the big shift in recent times?

What makes an investment property so attractive?

There are many reasons why people may love owning a rental/investment property.

An investment property can be a source of extra income, and right now, some investors are pocketing very attractive rental yields (that’s annual rent divided by the purchase price of the property).

PropTrack, for example, is reporting yields as high as 9% in some suburbs.

Investors may also expect to see their property grow in value over time, which could add up to some pretty impressive capital gains.

CoreLogic looked at the results of 86,000 property resales in the third quarter of 2023, and found 93.5% were sold for a profit, with the median gain coming at $298,000. Not bad at all.

And home values are tipped to jump a further 6% in 2024, according to ANZ Bank.

Add in rental vacancy rates hitting record lows of 1.1% in January 2024, and many investors are attracting good tenants, which can be great for cash flow.

How could the return of investors impact the market?

On a personal level, buying an investment property could potentially be a boost for your long-term financial well-being.

ABS has acknowledged that rising household wealth in Australia is being supported by house prices that have continued to grow despite higher rates.

More broadly, PropTrack points out that the re-emergence of investor activity “heralds good news for the overall health of the market, helping to drive more new construction”.

Long story short, the benefits of more rental properties could extend beyond individual investors.

Is an investment property on your radar?

If you’re thinking about buying a rental property, or you’d like to add to your current property portfolio, talk to us today about your options for an investment loan.

We can help you work out how much equity you may be able to leverage, as well as your overall borrowing capacity.

From there, we can help you track down a suitable mortgage with a competitive rate from our broad suite of lenders, leaving you free to focus on finding your ideal investment property.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

When will the next RBA cash rate call be made?

Happy days! The Reserve Bank kept rates steady in February. But a shake-up in the number of times our central bank meets each year is raising questions about how long the rate pause will last. Here’s what we could expect.

It seems fitting that in a month known for Valentine’s Day, the Reserve Bank of Australia (RBA) has shown borrowers some love by keeping the cash rate steady at 4.35%.

In reality though, the latest rate pause has nothing to do with romance or affection.

It’s more to do with keeping a lid on rising living costs.

After months of steadily rising prices, inflation looks to be heading south – currently sitting at 4.1%, down from 7.8% in December 2022.

That’s exactly what the RBA has been aiming for with their interest rate hikes.

Long story short, home owners can breathe easy – for now at least.

But when will the next cash rate decision be made?

RBA rate calls won’t be as frequent in 2024

Aussies are used to RBA rate decisions being made on a monthly basis, with a break for the holiday season each January.

That’s changing this year.

Instead of 11 meetings, the RBA will meet just eight times to decide interest rate movements, handing down their decision on:

– February 6
– March 19
– May 7
– June 18
– August 6
– September 24
– November 5
– December 10.

What do less frequent meetings mean for borrowers?

So, whatever rate decision is made in March, home owners need to live with it for almost two months until the RBA meets again in May.

As such, some pundits believe fewer meetings will naturally lead to fewer rate movements. Farewell to back-to-back rate hikes every month, for example.

However, experts also warn it might lead to bigger increases or decreases as the RBA has fewer opportunities to move the needle.

And that’s not to say individual lenders can’t, or won’t, change their home loan rates whenever they like, regardless of RBA rate decisions.

For example, Mozo reports that a number of lenders lifted their variable rates in December 2023 despite the RBA keeping the cash rate steady.

Buy now or wait for rates to fall?

While the February rate pause will be welcomed by borrowers, the RBA has cautioned that further rate hikes “cannot be ruled out”, especially if inflation starts to climb again.

Even so, plenty of lenders including NAB, the Commonwealth Bank and Westpac, expect to see interest rates fall this year.

There are no guarantees – a lot can happen over the next 12 months. But it does raise questions about whether now is a good time to buy a home, or if it makes sense to hold off until rates head lower.

On one hand, a drop in interest rates could boost your borrowing power.

The catch is that lower rates could stimulate home buying activity, potentially driving home prices higher.

If this happens CoreLogic warns we could see new measures introduced to contain housing credit risk such as changes to lenders’ loan-to-value ratios.

So when might be the right time to buy?

We believe the ideal time to buy a home is when you feel ready to do so.

And a good way to find out if you’re ready is to speak to us about your borrowing power.

We can help you crunch the numbers to let you know how much you could borrow, which in turn helps you figure out what kind of property you could afford to buy.

If that sounds like a good plan to you, give us a call today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.