How long for home loan approval?

enigma_brennan · Nov 14, 2007 1:42 am

Hi, I was just wondering how long others have had to wait to get their home loans approved?

We submitted our initial application to the Happy Drxgon at the start of September. It took four weeks (we were told two) to get pre-approval. We then waited a week before submitting our plans for valuation and we are still waiting - almost 11 weeks on - for final approval.

We are very p.ssed off as this delay has cost us $4,500 in stamp duty concessions that we will become ineligible for by the middle of November (the ACT has a rolling 12 month means test).

Our loan is a 100% loan (we pay the establishments, LMI, stamp duty and inclusion upgrades).

I would like to know what others think? Did we leave it too late to apply or is this the standard timeframe for land and construction loan approvals?

Cookiemonster · Nov 14, 2007 7:26 am

Our loan was approved in the time it took for the loans officer to plug all our details into the computer. It was approved on the spot in the office in about 20 minutes.

However we had over 20% deposit, so no mortgage insurance and the loans officer had authority to approve loans herself upto 800k.

This was with a major bank too.. that probably makes a difference.

rellie · Nov 14, 2007 7:34 am

We are with Rams. It took a day for pre-approval and a week for formal approval.

Yak_Chat · Nov 14, 2007 9:14 am

Yep 1 day for pre approval and they freaked when I signed a contract and said you have 14 days to do it. But they did

I would have throught the happy dragon, st george would be better than that and loosing the $4.5k that's just not on.
You need to ride them to make it happen, ring them every day if need be, it's the squeaky wheel that gets the oil.
Steve

Cookiemonster · Nov 14, 2007 9:20 am

Yak_Chat

I would have throught the happy dragon, st george would be better than that

Yeah thats strange. Im with St George, instant approval, we signed the loan documents the same day.

enigma_brennan · Nov 14, 2007 3:03 pm

Hi all, thanx for your responses!

It would seem that although the 100% loan may have contributed to some of the delay I now suspect that there may have also been some sort of stuff up which they are apparently covering up (an admission/apology would have been nice given the cost to us)!

Yak_Chat, good advice, but it's hard to be the squeaky wheel when going for a 100% home loan as very few lenders offer 100% for construction - so not much leverage (we went the 100% option because renting in Canberra is absurd).

I too had only heard good things about StGeorge prior to this experience so hopefully it's just a one out slip.

Yak_Chat · Nov 15, 2007 7:12 pm

Is it worth trying the hard word on the canberra authorities re the $4.5k as it was not your fault. Maybe lots of noise with them - re the banks doing something wrong will work.
Steve

enigma_brennan · Nov 16, 2007 12:19 am

Thanx Yak_Chat, great suggestion - I just checked and there is an appeals process so I certainly have nothing to lose!

As a footnote, I spent half an hour with the bank today and it appears (reading between the lines) that our mobile manager had some 'personal problems' and that our loan application was never actually submitted for approval. Hence, the poor service from the usually reliable StGeorge.

Anyway, while no one was actually offering apologies, I got a strong sense that we will be looked after from here on.

ps. not being one to hold grudges I hope the poor guy gets whatever help he needs

boomerj · Apr 15, 2008 4:15 pm

I concurr... your 100% loan will stretch the approval time due to lenders mortgage Insurance whichis more difficult to qualify for than the actual loan.

Why didnt your broker or banker sugest a 97% loan (the 3% can be savings by way of rent you have paid over the last year and it can be paid at settlement with an attached credit card or personal loan). The LMI will be significantly cheaper say around $8k depending on the loan val this way too.,

100% loans are a marketing ploy and no good for the customer.

Consider a split with a 25K Line of credit (to get the card for settlement for all the mortgage gurus out there!) and the remnainder as a term loan p&I.
This way you can reduce your interest bill and make substantial savings over the life of the loan.

brendanj@achl.com.au

razzle · Jul 23, 2008 11:46 pm

our approval, through a broker, took 6 weeks, we had > 10% deposit, were already customers of the bank. The hold-up was apparently getting a valuer? still I do not think this takes 3 weeks!

They then took 4 attempts to get out mortgage documents right before we could sign them and ended up having to have them express courierd from Adelaide so we could get it done on time for our land settlement

PrincessB · Jul 25, 2008 11:40 am

We are currently waiting on a pre approval with CBA.

So far, just the pre approval has taken 3 weeks. Apparently the banks are getting strict with lending (we will be borrowing 80% so that would have alot to do with it). Not looking at anymore land/displays until thats done!

and3rs0n · Jul 25, 2008 11:55 am

PrincessB

We are currently waiting on a pre approval with CBA.

So far, just the pre approval has taken 3 weeks. Apparently the banks are getting strict with lending (we will be borrowing 80% so that would have alot to do with it). Not looking at anymore land/displays until thats done!

My loan approval with CBA was approved on the spot by their computer system. I am also borrowing 80%. I did not go through pre-approval stage. Strange that it took you so long.

PrincessB · Jul 25, 2008 12:03 pm

We are going through a finance broker in Brisbane. I am unsure why its taking so long, it takes days just to reach him on his mobile.

Maybe we should have went to the bank direct...

and3rs0n · Jul 25, 2008 12:38 pm

10bucks that they have no submit your details to the bank

thlo · Oct 18, 2008 3:19 am

Home loan approval times fluctuate greatly week by week and also by the lender in question. It is quite common to have unconditional (ie. full or formal) approval (with a full valuation conducted) in 2.5 days of submission from one lender and have 5 days by another just for a conditional approval (including LMI conditional approval).

And sometimes, you have the horror story where the bank staff make 4 consecutive errors each costing one week in delay. Please don't expect an apology from an institution, it doesn't happen. The only thing you as the consumer can do is complain to the Ombudsman, they will get your result.

Quote:

when going for a 100% home loan as very few lenders offer 100% for construction - so not much leverage (we went the 100% option because renting in Canberra is absurd).

There are many lenders (banks, too) that provide 3% deposit construction loans and an educated broker can provide them to you. Your contribution would have been less that way as the LMI (you have to pay that in a 100% loan) costs more than 3%

There is no way of predicting service levels as it depends on what the lender's staffing levels are like and how they view your home loan application. Because volume of home loan applications fluctuate greatly these days and the assessors take longer to examine more carefully, you can only have an estimate of turn around times at the time of submission (so your bank lending manager / mortgage broker should call you after your application is submitted and give you this information) . To give you an example of what may cause a delay, if your lending manager / broker forgets to ask you for a piece of document that is in the checklist and submits your application without the required document, the assessor is going to start looking at your file and send an email to your lending manager / broker requesting the missing doc. and put your file to the bottom of the pile where it will stay until he/she calls you to collect it and forwards to the assessor.

But there is no excuse for not communicating to the customer what the expected turn around times are. I would find it outrageous if someone delayed my application like that and cost me $ thousands. Why didn't you complain to the MFAA or the Banking Ombudsman seeing that you were dealing with bank staff? (If you were dealing with a broker, you would complain to Credit Ombudsman) It is the basic requirement of a consulting service, that your home loan broker/ bank lending manager has to inform you at each milestone what has happened and what will happen next and when. You wouldn't tolerate it if your plumber left a leaky tap. Anyway that's my service philosophy.

thlo · Nov 25, 2008 10:04 pm

PrincessB

We are going through a finance broker in Brisbane. I am unsure why its taking so long, it takes days just to reach him on his mobile.

Maybe we should have went to the bank direct...

You've been really unlucky. You had the same experience in July and then now in November. Are they different brokers or the same? What about the bank, same?

yvette72 · Dec 14, 2008 10:30 am

same day took about a week for the letter to come out

thlo · Dec 24, 2008 2:38 pm

some banks are breaking processing delay records these days (upto 3 weeks to process an application).

You need to check with a professional mortgage consultant which banks or non bank lenders have the fastest turn around for home loan approvals. it may be the difference between buying that dream home or not.

Ninga · Dec 24, 2008 3:02 pm

I've just had a home loan approved and it barely took 2 weeks. Papers are waiting for my signature at my solicitors office though, and they're closed for holidays! Loan is through IMB though, and they're a smaller bank I guess?

yvette72 · Dec 26, 2008 4:37 pm

we had approval from cba in a day