Getting pre-approved for a mortgage is an important milestone, but it’s just the beginning. Between pre-approval and collecting the keys, there are several distinct stages, each with its own requirements and potential complications. Knowing what’s coming makes the whole process far easier to navigate.
Stage One: Pre-Approval
Pre-approval is the lender’s conditional indication that they’re willing to lend you a specified amount, based on an assessment of your financial position. It gives you a working budget and signals to vendors and agents that you’re a serious buyer. Most pre-approvals are valid for 60 to 90 days, so timing matters.
At this stage, your adviser or bank will have assessed your income, expenses, credit history, and deposit. Any issues worth addressing, outstanding debts, documentation gaps, or credit file concerns are best resolved here, before you’ve found a property. For more detail on what pre-approval does and doesn’t cover, see our earlier post on how pre-approval works.
Stage Two: Finding a Property and Making an Offer
With pre-approval in place, you’re ready to make offers. When your offer gets accepted, you’ll sign a sale and purchase agreement with conditions, typically finance, a builder’s report, and a LIM report. The finance condition gives you time to convert pre-approval into formal loan approval for the specific property.
Contact your mortgage adviser as soon as the agreement is signed. The clock starts immediately on your conditional period, and your adviser needs the property details to submit the formal application.
Stage Three: Formal Loan Approval
During the conditional period, the lender assesses both your financial position and the property. A registered valuation may be needed, and the credit team reviews the full application before a formal loan offer goes out.
If the valuation comes in below the purchase price, the lender may advance less than expected, which could require a larger deposit to bridge the gap. If the lender has concerns about the property type or condition, they may decline to lend against it, which triggers your finance condition and lets you exit the agreement without penalty.
Once the formal offer arrives, your adviser will walk you through it. This is the right moment to confirm your loan structure, fixed versus floating, loan term, and any offset or revolving credit components before the agreement becomes unconditional.
Stage Four: Going Unconditional
When all conditions are satisfied, you notify your solicitor to go unconditional. At this point you’re legally committed to the purchase. Make sure you’ve received your formal loan offer and reviewed it carefully before this step. Your solicitor and adviser should both be across the details before you proceed.
Stage Five: Preparing for Settlement
Between unconditional and settlement, your solicitor manages the legal transfer, including requesting loan funds from your lender and registering the title change. Your lender prepares the mortgage documentation for you to sign and return ahead of settlement.
Arrange property insurance to take effect from settlement day, most lenders require confirmation before releasing funds. A pre-settlement inspection, usually one to two days before settlement, lets you confirm the property is in the expected condition and all agreed chattels are present.
Stage Six: Settlement Day
On settlement day, your solicitor transfers funds to the vendor’s solicitor. Once confirmed, the title transfers into your name and the keys are released, usually through the real estate agent. Stay in contact with your solicitor on the day so you’re across any delays.
Settlement can occasionally slow down due to documentation issues or fund transfer timing. Getting paperwork done early and staying available to respond quickly to your solicitor reduces the risk of a hold-up on the day.
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The information in this article is general and educational only; it’s not financial advice. For advice tailored to your situation, we can connect you with a licensed mortgage adviser.
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