RedCap Finance Brokers - The Mortgage Process

The Initial Inquiry - Pre-Planning and Indicative Borrowing Capacity

Applying for a loan involves much more than filling out paperwork and saying a prayer. Among other things, you need to consider the state of your personal and business finances, how you’re going to repay the loan and how much money you actually need. 

4 Steps to Ask Yourself BEFORE Inquiring about getting a Loan

• Ask for advice first, inquire about getting money second. Be honest about your situation and ask if there's any way you can achieve your goals WITHOUT borrowing money!
• Establish the NEED as to why You Need to borrow the money.
• Accept Responsibility for using Other People's money and the need to make sure that you can pay it back without causing hardship.
• Make your own worst case scenario plan on how you will repay the loan - even when your world turns upside down.

Now you know what you need in your plan - then contact with RedCap Finance Brokers - who will assist in helping you to "Get Finance Ready" and do an Indicative Pre-Approval (Borrowing Capacity) to establish a great starting point.

Initial Appointment With RedCap Finance Brokers

The first step in applying for a loan is to complete RedCap Finance Brokers' Initial Inquiry / Indicative Pre-Approval Questionnaire and make sure you click the submit button. Then an experienced Credit Advisor will assess your situation based on the information you have entered, and with this information they are ready for the initial appointment with you either in person or by digital means (phone, video conference, etc)

The purpose of this meeting is to help explain your results and the different financing options that may be best suited to your goals.

This initial stage of the process does not guarantee that a lender will grant you an approval for a mortgage, however it does provide the knowledge required to set realistic expectations in achieving that goal.

CREDIT NEEDS ANALYSIS - THOROUGH ASSESSMENT & VERIFIED FACT FINDING

The 5 Fundamentals of ALL Lending are:

• Correct Identification of ALL applicants
• Legitimate sourcing of all funds used to complete
• Cashflow / Repayment Capacity
• Ability to manage debt
• Security

This stage includes an in-depth Credit Needs Analysis, Lender Selection, and final product selection that best suits your needs.

Lender Application

At this stage, we have usually met all the required parts to complete a Lender's application form. It is merely filling it out and submitting the form with ALL the required supporting documentation that the lender's assessment team will need to process your application.

Once Assessed, and all documents are in order, then a CONDITIONAL APPROVAL is issued.

This conditional approval will outline all remaining items that must be checked off before Unconditional Approval is issued. Things like...

• Satisfactory Security Valuation
• Any extra verification or additional documents required for compliance
• Obtain LMI (Loan Mortgage Insurance) approval (if required)

Unconditional Approval (Formal Loan Approval)

After everything has been checked and is satisfactory to the bank then an UNCONDITIONAL Approval will be granted, this is called being FORMALLY APPROVED. The lender will send you the loan documentation (contract) for all parties to sign to eneter into a formal loan contract with ALL its binding terms and conditions.

It is advisable that you receive independent legal advice about this contract from your solicitor BEFORE your sign. It is in most cases not absolutely necessary (you can waive your rights to independent counsel) - except when doing a Reverse Mortgage (SENIOR's Loan) it is a compulsory part of the loan's terms & conditions.

Once all parties have signed the contract, return it to the lender for execution, with any additional requirements that they need to settle the loan. Do this as soon as possible to avoid any possible delays at settlement!

Settlement

At this stage, once an UNCONDITIONAL Approval has been issued, then the Settlement process begins. After the lender has certified that all of your documents are in order, they can then advance the loan funds.

• For a purchase, we will call your solicitor or conveyancer and let them know that the funds are available. Your conveyancer will book in a settlement time and date with the lender.
• For a home loan refinance, your new lender will arrange with your current lender to payout their loan and take possession of your mortgage title. They will book in a time to meet and sort this out automatically.

Settlement has occurred - when the loan is advanced and RedCap Finance Brokers will notify you as soon as the lender informs us.

Ongoing Reviews

After Settlement, it is recommended that a regular review of your loan is undertaken annually or at the most bi-annually; to ensure that this loan is still is the best product for you. At this review period, an assessment is made to ascertain if this product is still right for you, or whether we need to try and make any tweaks (if possible), or if we need to refinance this loan to get a better deal.

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Pay Off Your Loan Faster

The faster you off your loan - the less INTEREST & FEES you will pay - therefore making the overall loan cost CHEAPER. The main benefit of paying off your loan early is that you no longer have to budget that money to pay back a lender. This repayment money can now be diverted to lifestyle expenditure, or to further investment opportunities.

Get Moneysmart Advice: 6 Ways To Pay Off Your Loan Faster - Click Here