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7 things you can do to minimise delays on your home loan (and get approved faster!)

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Yes, it’s credit squeeze time and that means home loan approval times have blown out from 6 weeks to 9 weeks. The post-Royal Commission crunch has resulted in increased regulatory scrutiny of home loan applications and an uptick in lenders requesting more supporting information before approving a loan. If you’re not keen on waiting, here are 7 things you can do to minimize delays to get approved faster.

1. Aim to have more than 20% equity or a 20% deposit

The more equity (if you’re refinancing) or deposit (if you’re buying a new property) you hold, will put you in a much stronger position from the lender's point of view.

The more deposit or equity you hold means you’ll have a lower LVR (loan to value ratio), ideally below 80%. Lenders want to know you’re not a risk to them and a lower LVR means you have a larger stake in the property and more to lose if you ever did default. An LVR above 80% is generally the cut off for needing to pay Lenders Mortgage Insurance and high LVR loans can sometimes come with higher interest rates.

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2. Have your documents ready and in order

Gathering your documents is perhaps one of the most time consuming parts of the home loan application process. You’ll need to provide documentation to confirm your identity, your income and expenses, as well as your assets and any existing loans you may have.

If you provide incorrect or out of date documents your application will likely incur delays. The primary documents you’ll need to provide are:

  • Proof of identification: passport, drivers licence, birth certificate
  • Income: recent payslips, bank statements, PAYG statement, group certificates
  • Expenses: a detailed list of your monthly expenses from childcare to Ubers
  • Assets: ownership details for other properties, cars, savings, superannuation
  • Liabilities: statements for any existing debts, credit cards, loans, outstanding AfterPay balance

You can get a full breakdown of the documents you’ll need to provide here.

3. Watch your spending

These days lenders are taking a forensic look at borrower expenses so make sure to declare everything from eating out and takeaway, to taxis and Ubers.

Lenders will review your bank statements in detail as part of assessing your loan application. If they spot enough significant expenditures that were not declared in your application, they may ask for more information regarding these expenses.

Whether you’re planning on refinancing or buying a new home, it’s important to keep in mind that your recent expenses will be examined and be more mindful of your discretionary spending and in particular recurring expenses such as gym memberships and Netflix subscriptions, as well as betting and gambling spending.

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4. Make sure you have declared ALL of your liabilities

Got a credit card you’ve never used? You still need to declare it. Don’t forget to include details of all loans or debts under your name, no matter how big or small.

And yes, this does include any active credit cards that you have paid off, minor short-term loans, payday loans, and any outstanding AfterPay payments you need to make. Forgetting to declare these loans can cause delays in processing your loan.

5. Be prepared to be asked for more information

These days, lenders are being extra cautious and as a result are regularly asking for extra information from prospective borrowers. Don't worry if you get such a request, just as you think your document gathering is over!

Nowadays it's quite common for lenders to ask borrowers for extra information such as extra bank or loan statements before approving a loan. All you can do to speed up the process is to be prepared for the unexpected and act quickly when more information is requested.

6. Apply online

You’ll be notified immediately if your lender requires more information and you can check your loan’s status anytime 24/7. You can complete your application quickly and in your own time online and avoid time consuming trips to the bank by securely uploading and verifying your documents using an online home loan platform (like ours).

7. Don't despair if you don't get approved the first time

Sometimes lenders change their policies and restrictions after you have applied. While this is frustrating, it is out of your control.

The good news is that there are always more options. We work with a bunch of lenders who offer more than 2,000 loan options. If your loan isn't approved the first time round, your Home Loan Specialist will work with you to find a more suitable option that is still a great fit for you.

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Our goal has always been to make the home loan process more efficient. If time is of the essence and you’re concerned about potential delays for your particular situation, then chat to one of our friendly Home Loan Specialists. We’re more than happy to help.

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Tags: deposit, application fee, application form, fast approval, new purchase, refinance, first home buyer

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Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856, Credit Representative 518849), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Aussie business. Our mission is to provide Aussies with the right experience when choosing a home loan from our panel of lenders including ClickLoans, a related body corporate of Auscred Services. Although Lendi compares over 1600 products from over 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 40% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors. We have an independent and founder led board.
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
EXAMPLE: This example is current as at 20th October 2016. A Click Loans Online Principal and Interest Loan of $150,000 over 25 years has monthly repayments of $767. This is calculated based on the interest rate of 3.69%, comparison rate of 3.69%, upfront fees of $0 and annual fees of $0.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
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