From Application to Approval for a First Home Loan
Buying your first home is an exciting milestone, but navigating the home loan process can feel overwhelming at first. With the proper guidance, however, you can move smoothly from application to approval and unlock the door to your new home.
At Horizon Bank, we specialise in making this process straightforward and stress-free for first-home buyers. This blog will take you through every step of the home loan process, from preparation to final approval, so you know exactly what to expect. Along the way, we’ll share actionable tips to make your application as strong as possible and demonstrate how Horizon Bank supports you at every stage.
Preparing for Your Home Loan Application
Before submitting your application, it’s essential to lay the groundwork. Proper preparation can help ensure your application is reviewed quickly and increase your chances of approval.
Assess Your Borrowing Power
Start by understanding how much you can afford to borrow. Borrowing power depends on factors such as your income, expenses, existing debts, and the size of your deposit. Use Horizon Bank’s borrowing power calculator or speak with one of our local lending experts to get a clear idea of how much you can realistically borrow.
Save for Your Deposit
Your deposit plays a crucial role in the application process. Ideally, aim for a 20% deposit of the property’s value to avoid Lenders Mortgage Insurance (LMI). If saving for a larger deposit isn’t possible, Horizon Bank can guide you through options for higher Loan-to-Value Ratios (LVR).
Check and Improve Your Credit Score
Lenders review your credit score to assess your financial reliability. Ensure you have a strong credit history by paying bills on time, reducing debt, and fixing any errors on your credit report.
Minimise Debts and Expenses
Reduce or eliminate any existing liabilities, such as credit cards or personal loans, before applying for the loan. Lowering your monthly expenses helps demonstrate your ability to manage future loan repayments.
Gathering the Required Documents
Getting your paperwork together before submitting your application will save you time and effort. Here’s what you’ll typically need to provide when applying for a home loan.
● Proof of Income - Provide recent payslips, tax returns, or a letter from your employer to confirm your earnings.
● Bank Statements - These should detail your savings history and daily expenses.
● Identification: Have government-issued photo ID ready, such as a driver’s license or passport.
● Details of Existing Debts - Include credit card statements or records of any outstanding loans.
● Property Information (if applicable) - Share the sale contract or a summary of the property you’re planning to purchase.
By gathering these documents in advance, you can streamline the application process and prevent delays. At Horizon Bank, our team will guide you on exactly what’s needed so you can be fully prepared.
Submitting Your Application
Once you have all your documents ready, it’s time to submit your home loan application formally.
How to Apply
Complete a detailed application form, providing accurate information about your financial situation and the property you wish to buy. Horizon Bank’s loan specialists will review your application and may recommend loan options tailored to your specific needs.
What Happens Next?
After submission, the bank will review your information and determine whether to proceed. You’ll be asked for clarification or additional documents if needed, so please respond promptly to avoid delays. Horizon Bank’s personalised service means you’ll always have a direct point of contact who can guide and update you throughout this step.
The Assessment Process
After receiving your application, lenders conduct an in-depth review to decide whether to approve your loan. Here’s what they look at during the assessment phase:
● Your Income and Expenses - Lenders confirm you can comfortably afford repayments based on your financial situation.
● Your Credit History - A strong track record of managing debt works in your favour.
● The Property’s Value - If you’ve already chosen a property, lenders will ensure its value supports the loan amount.
How Long Does It Take?
The assessment process can take anywhere from a few days to a couple of weeks, depending on the complexity of your application. At Horizon Bank, we take pride in our efficient processing times, ensuring that things move smoothly for you.
Conditional Approval
Once your application passes the initial assessment, the lender may issue conditional approval. This means your loan will be approved as long as you meet specific conditions.
Common Conditions to Fulfil
● Providing additional documentation (e.g. updated payslips).
● Completing a satisfactory property valuation.
● Submit further details about your finances if requested.
During this stage, stay in close contact with your lender. Horizon Bank makes this process seamless by providing clear instructions and proactive updates.
Final Approval and Settlement
After meeting all the conditions of your conditional approval, you’ll receive final approval for your home loan. This is the last step before settlement—where ownership of the property is transferred to you.
What Happens at Settlement?
Your solicitor or conveyancer will coordinate with the bank and seller to finalise legal documents.
Horizon Bank will arrange the transfer of funds to complete the purchase.
You’ll receive notification when everything is complete, and the property is officially yours.
Managing Timelines
While the settlement process usually takes several weeks, Horizon Bank ensures smooth coordination to avoid delays. We’ll work closely with your legal team to make the final stage as stress-free as possible.
Tips for a Smooth Application-to-Approval Journey
Applying for and securing a home loan doesn’t need to be daunting. Here are some tips to keep the process on track and efficient.
● Be Organised - Gather your documents early and keep them up to date.
● Communicate Promptly - Respond quickly to requests for additional information or documentation.
● Avoid Major Financial Changes - Refrain from applying for new credit or making large purchases during the home loan process.
● Choose the Right Lender - Work with a local lender like Horizon Bank, which understands your unique needs and provides hands-on support.
Start Your First Home Loan Journey with Horizon Bank
Buying your first home is a big step, but with the right partner by your side, it doesn’t have to feel overwhelming. Horizon Bank is dedicated to supporting first home buyers with competitive rates, local expertise, and a personalised approach.
From application to settlement, we’re here to guide you every step of the way. Ready to get started? Speak to a Horizon Bank lending expert today to begin your home loan journey with confidence.
The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.
