It’s an exciting prospect considering your future in a new home. All the hard work and patience culminate in one magic number that gives you the key to unlocking the next chapter of your life. This doesn’t all come together overnight, which is why some builders will also offer thorough and tailored finance. If you’re a first home buyer, you likely have a series of questions surrounding the access and process of securing finances. Rather than bouncing around the FAQ bank pages and seeking outdated information, here we’ve captured the next steps in your financing pathway.
When you have your initial consultation with the sales rep for the builder they will either forward you onto their preferred financial partner or you can talk to your preferred broker. You should find better financial security through a reputable provider, so do your research. The broker can meet you at their office, your home or at your work to go over any important questions and to start the paperwork.
Depending on the home solution you are interested in, the pre-approval process will include making sure that lot or land package is available and within your nominated budget. When pre-approval for the amount is secured, it will remain valid for 90 days from the date of issuance. This is a step which will introduce accountants and solicitors.
As the name suggests, formal approval is when your loan amount is approved after the bank receives a signed building contract and a council approval plan. These papers will be signed together in person and another opportunity to discuss options and answer any remaining questions. From there, the builder will follow up the lender for an Authority to Commence letter. This will then be forwarded to the builder in readiness for scheduled progress payments.
The progress papers stage is next in the chain of events and requires the lender to inspect the site to ensure that the slab has been poured so that they can release the funds. Typically allow for 5-7 days from the inspection until the funds are received.
By this stage the bank will again require a valuation to confirm the construction is now completed. You will provide an occupation certification and home insurance policy to trigger the final payment from the bank. At this point, your site manager will have taken you onsite at various points to view the home, and discuss final steps. In the instance that you already have the final amount, you can pay directly and the bank will reimburse you out of the loan.
After the loan
When you are moved into the home, your relationship should not end with your broker. A good broker will continue to work with you to secure the best rate for homeowners. This means that if a special offer becomes available or a new financer is more attractive, this should be communicated to you.