It's only when people have actually started searching for their new home / investment property that many of them start looking at getting a loan. What may seem very straight forward then often ends  up with a few hitches and/or delays.

Why? It's usually because the buyers weren't fully aware or informed of the loan process and what information they needed to have available to get the ball (and the loan process) rolling smoothly and quickly.

Delays for finance approval often cause delays in settlement which, in turn, can bring other problems with it - especially if you're trying to organise a move or new tenants.

There was a lot of interest after our last 'Getting a home loan - what's the process?' newsletter so we've gone back for a Q&A session to Paul McLennan, the Bank of Queensland CBD-branch manager who provided his insights and information for the last newsletter.

Q: How long does the finance approval process usually take (for a 'typical' Brisbane CBD apartment)?

6 to 8 business days. However, if a pre-approval is in place it should only take 3 to 4 days (including valuation)

Q: What are the main reasons for not approving finance for home loans?

No one reason and most are unavoidable! But the main reason for delays or incorrect decisions is that often, applicants do not supply full disclosure at outset of loan interview/process. This also
includes any documentation that may be requested.

Q: What is the minimum deposit property buyers should have when applying for a loan – for investors? – for owner occupiers?

Both owner occupied and investment is five percent - however inner city units are 10%.

Although these are the minimum, property buyers should ideally aim for 20% deposit.

Q: What are Low-Doc & No-Doc loans and why do they differ from your 'standard' home loans?

Low Doc Home Loans are a flexible financing solution for the self-employed who have income and assets, but may not have the usual paperwork like financial statements or tax returns ready at the time of application.

Q: What role does the valuation play in deciding if a loan is approved?

This protects both the customer and the lender i.e. ensure that the customer is paying fair market value for the property.

DOs and DON'Ts

• Don't underestimate the role your future goals can play in selecting the correct loan
• Do get as much independent advice as possible
• Do make a budget. This is the way to save most money throughout your Home Loan.
• Do consult a Home Loan specialist - they help find the RIGHT loan to suit your needs

Many thanks again to Paul McLennan for this useful insight. For any home loan queries or information please contact Paul on 0428 037 891 or
email paul.mclennan@boq.com.au  .