The pre application process

Initial Conversation

We will discussing about your scenario to determine likely it is that you’ll be eligible for a loan. It also allows you to get to know about us Paragon Lending Solution, our services and how we can assist you on your financing goals and needs.

First meeting

During our first meeting, we will be completing an application form so that we can begin the preliminary assessment of your situation, needs and objectives. We will also require supporting documents in one go, to allow us to give you a quick and accurate assessment.

Preliminary Assessment

After we have your application and supporting documents we are able to do a preliminary assessment of your situation. The preliminary assessment is a very detailed process where we identify any possible problems from a lending point of view.

We will calculate your borrowing capacity as well as the fees and charges from various parties to the transaction. We will then determine which lenders can assist through their current credit policy and compare the most suitable loans with the very best deal. Please note that the lowest interest rate may not always be the best deal because there may other fees and charges, promotional offer etc which are not taken into account.  After the preliminary assessment, we then present two or three recommended loans to you so you can pick which one you prefer.

Submit to a lender

When you have chosen the most suitable loan for you, we will then prepare to submit your application to the lender. We will ask you to provide any final documents and to sign the lender’s application and privacy form. We highlight the strengths of your application and present it so it suits the way that the particular lender will assess the loan.

Once we have everything we need, we will submit it on the lenders system and send through your supporting documents to the lender.

Loan Application

Conditional Approval/ Pre-Approval

Pre-Approval, also known as indicative or approval in principle, is not full approval. Once the lender has all your application and supporting documents, the lender then assesses your application and confirms that you meet their policy. The lenders issue an approval subject to particular conditions. For example, a condition could be that the property being used as security is acceptable to the bank.

If you have not yet found a property then we can get your loan pre-approved by a lender. That means, as long as the property meets the lenders guidelines then they are likely to approve the loan.

A pre-approval is valid for ninety days with most lenders. They can be extended if need be by providing up to date pay slips and other documents.

Some people buy a property before they have a pre-approval. They sign the contract to buy a property and then they organise their loan. This can be risky. If they can’t get a loan then they may lose their deposit on the property.

Valuation

Once you have chosen your desired property, a valuer will make an appointment to inspect the property.

The bank does not employ valuers, they are separate companies. As a result the time taken by them can vary. In some cases, tenants can delay the valuer from gaining access to the property.

For very low risk applications a valuer may not be required. These are known as desktop valuations.

We can order up front valuations with many of our lenders, which enables the bank to skip the first two steps and go straight to formal approval.

Unconditional Approval/Formal Approval

Unconditional Approval, also known as formal approval, is when the lender has everything they need and can confirm that they are willing to lend you the money.

They will issue a letter confirming their approval. At this stage you can relax.

Sometimes there is some going back and forth asking for additional documents before the bank can finalise approval.

This is normal for complex applications or where you have not provided everything that the lender needs up front.

If you are borrowing over 80% LVR then you may need lenders mortgage insurance approval as well.

In some cases this will mean that your application will take longer before a final approval.

You should get formal approval before the end of the cooling off period.

Loan Offer Issued

Once the loan has been formally approved then the lender will send you a loan contract for you to sign to accept their loan. You can go through this contract with your solicitor if you would like to receive independent legal advice. This is optional for loans involving refinancing but are recommended for property purchases.

Once you have signed the contract return it to the lender with any requirements that they need to settle the loan.

Settlement

Once the lender has certified that all of your documents are in order, they can then advance the loan funds. For a purchase, they will call your solicitor or conveyancer and let them know that the funds are available. Your conveyancer will book in a settlement time and date with the lender.

For a refinance loan, your new lender will arrange with your current lender to repay their loan and take possession of your certificate of title. They will book in a time to meet and sort this out automatically.

Settlement has occurred when the loan is advanced. We will notify you as soon as the lender informs us.

Post settlement

After your loan is set up we will call you a couple of times after the settlement to make sure that you understand the loan and know how to make repayments.

We will also ask for a copy of the settlement letter. We will check the settlement letter to make sure that the lender hasn’t overcharged you.

Annual Review

We will call a customer annually on the anniversary of their settlement to check that they have not had any problems and review their home loan.

Ongoing Help

We provide ongoing help with our customers, long after they have settled their loan. During these opportunities we are able to help customers:

Applying for a new loan

Reviewing their interest rate

Switching loan products

Determine whether they should fix their loan rate or not

Discuss any hardship or potential problems with their loan. This is to make sure that you are getting the most out of your loan.

How long does a loan application take?

The time that a loan application can take will vary significantly as some borrows will have more complex applications than others. Lenders who offer a lower interest rate are often slower as they receive more applications.

Other lenders are completely incompetent! We will warn you if any of the lenders we are recommending are known to have poor service levels.

Indicatively, it takes most customers 48 hours to send their documents to us. Depending on the complexity of the loan, we will then take 24 hours up to a few days for us to confirm our recommendation.

When the lender receives the loan it can take anywhere from few hours to two weeks for them to complete conditional approval. The valuation can take from two days to one week.

Formal approval can take from one day to one week.

The best way to find out is to call us to confirm the time required. However, as a general rule, if you are buying a property allow a two-week cooling off period or finance clause to give us ample time to obtain an approval.

What documents will I need?

Throughout the application process you will be given a list of documents required. These will include the following:

Payslips. These must be recent and when multiple payslips are required, they must be consecutive. They should clearly show employer name, your name and salary, ABN, YTD etc

Account statements. These must show account numbers, balance, limit and transactions for the period specified

Liabilities and Expenses documentation. Includes statements for car loans, other mortgages or credit cards.

Asset documents. These documents can include banks statements or rates notices to show your savings record.

Contract of Sale. Send through the details of the property you wish to buy and the signature pages. There is no need to send through the entire contract.

If your name has changed due to marriage or divorce please provide a marriage certificate or other verification. Statutory declarations will suffice.

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