Top Strategies to Speed Up Your ADF Home Loan Approval

Home loan approval moves faster when your paperwork is ready before the lender asks for it.

This article covers the steps in order, what affects timing, and how to plan around service life.

What Are the Steps in the Home Loan Approval Process?

The approval process runs in a set order: a borrowing assessment, a home loan application, lender assessment, a property valuation, formal approval, then settlement. Each step depends on the one before it, so a gap early on holds up everything after it.

First, your broker works out your likely borrowing capacity from your income, expenses and debts. Next, you choose a lender and loan, and submit the application with your supporting documents. The lender then assesses your finances and orders a valuation on the property. If everything lines up, you receive formal approval, your conveyancer coordinates with the lender, and the loan funds on settlement day.

If you are buying an owner occupied home loan property in NSW, your solicitor or conveyancer handles the contract side while your broker handles the lending side. Keep both of them updated on any change to your plans.

How Long Does Home Loan Approval Take?

There is no fixed timeframe for home loan approval, because it varies by lender, the completeness of your documents and how quickly the valuation is done. A tidy application with all documents attached usually moves faster than one where the lender has to chase information.

Four things most often slow a file down:

• Missing or unclear documents, such as payslips that do not match the income you declared
• A valuation that comes in lower than the purchase price
• Questions about allowances, or about income that changes with a posting
• Changes to your finances partway through, such as a new car loan or credit card limit

Your broker can ask the lender which of these is likely to affect your file before you apply for a home loan.

Home Loan Pre-Approval: Do It Before You Inspect Anything

Home loan pre-approval gives you an indication of how much a lender may let you borrow, so you can search with a realistic budget. It is not a final approval. It is conditional, and the lender can change its position if your finances or the property do not meet its requirements.

The trade-off is that pre-approval involves a credit check and the paperwork effort up front. It also only holds for a limited period set by each lender, so ask how long yours lasts. If your search drags on or a deployment interrupts it, you may need to have it reviewed again. Our page on getting loan pre-approval explains how it works in more detail.

Example: A Posting Order Lands Mid-Search

A posting order mid-search can be managed if you tell your broker straight away, because the lender needs to know your income and employment status before it assesses the file.

Consider an Army member in NSW who gets pre-approval, then receives a posting notice while inspecting homes. Left alone, the new location and a possible change in allowances could raise questions late in the process. Instead, the member tells their broker the same day. The broker gathers the posting paperwork and a current payslip, and flags the change to the lender before the application goes in.

The member also checks the numbers. At the illustrative rate of 6.75% p.a., a loan amount of $600,000 over 30 years on principal and interest works out to roughly $3,890 a month. This is only an example, and your own figures will depend on your lender, loan and deposit. A calculator is useful for calculating home loan repayments before you commit.

The outcome is a file with no surprises. The lender has the full picture from the start, so it can assess the application without stopping to ask for explanations. The member then makes an offer knowing the repayment fits their budget.

Prepare Your Documents Around Service Life

The most useful preparation is to organise your income evidence, identification and account statements before you apply, and to check how a lender treats your allowances. Lenders can treat allowances differently, so ask your broker which lender suits your pay structure.

If you are deployed or away on exercise, arrange who can sign or send documents on your behalf, and confirm what your lender and conveyancer will accept. Do this before you need it. A week out of contact can stall a file at the point where the lender is waiting on a single answer.

Also avoid taking on new credit while your application is open. A new loan or higher card limit can reduce your borrowing capacity and prompt the lender to review the whole file.

Deposit Size and LMI Can Change Your Approval Path

A smaller deposit can add steps to approval, because the lender may require Lenders Mortgage Insurance (LMI) or additional checks, and a lower deposit means a higher loan to value ratio (LVR). LMI is an added cost, usually passed on to you, so weigh it against the benefit of buying sooner.

Options such as the Home Guarantee Scheme or low deposit loans for ADF members may suit some buyers, but each has its own eligibility rules and lender requirements. Check these early, since a scheme that does not fit your situation can cost you time. For a broader view of what suits NSW buyers, see our page on ADF home loans in NSW.

A good broker will lay out the cost and the trade-off of each path before you commit, so the approval you get is one you can live with for the long term.

Call one of our team or book an appointment at a time that works for you, and we will map out your approval steps around your posting and deployment schedule.

Frequently Asked Questions