How to get a home loan in time for Christmas – realestate.com.au

The crazy season can be peppered with beach days and family gatherings, but it can also be a surprisingly smart time of year to buy a home, if you can get approved for a mortgage, of course.

Many Australians will hit the pause button on house hunting until January, but those buyers who stay in the game over the holiday period may find there is less competition and more motivated sellers.

While this may be the right time to make an offer, navigating the mortgage process in December requires strategy. Because many lenders and law firms are operating with limited staff, an interested buyer is in the best position to take action quickly.

Buyers who plan ahead, have their finances in order, control their expenses and have experts they can lean on can take action while the competition is in vacation mode.

Start early to get ahead

Timing is often the biggest obstacle for home seekers in December. Approval times for lenders, which typically last just a few days, can stretch into weeks as staff take annual leave and holidays hamper business. Even applications started before Christmas may remain shelved until January.

Brisbane based Mortgage Choice agent Laura Nadal says borrowers should plan for a month of disruptions around the end of the year.

“From that last week before Christmas, you can almost guarantee that your lawyer will go on vacation and not return until sometime in January,” she notes. “That entire period is often a complete shutdown.”

Nadal explains that organization is the key to avoiding additional stress during an already stressful time.

“When you’re ready, apply right away,” she says. “Right now, lenders are still working very hard so that they can get approval before the Christmas closure.

“Have all your bank statements at hand, all your pay stubs, identification, tax returns, savings certificates and statements of any loans or credit cards. However, if you don’t have all your documents in the first week of December, you can look at prior approval in January.”

Eliminate debt and get pre-approved

Summer is the best time to overspend, and budgets can quickly spiral out of control. Borrowers should therefore be aware that a flamboyant festive period may cause lender concerns and have implications for lenders. borrowing capacity.

Your debt-to-income ratio is an important factor that lenders use to determine your borrowing capacity. It’s important to remember that bank and credit card statements from the holiday season will be scrutinized to identify spending patterns, especially over the past three to six months. New commitments to ‘buy now, pay later’ services – often used around Christmas – could also work against you.

“If you have a credit card or personal loan, it’s a good idea to get rid of that debt right away because it can take a while for those companies to send you a closing letter,” says Nadal.

Serious sellers are ready to move

For motivated buyers, the holiday season can provide a unique window. Some sellers are offering a sale because they’re moving for work in the new year, moving to start a new school year, or simply would like to complete a sale before Christmas. In these cases, your pre-approval status becomes a powerful tool because it shows sellers and agents that you are ready to buy.

Sellers who have chosen to go ahead with a year-end sale often want to act quickly. Photo: Getty

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“As long as you submit the application before the first week of December, they will probably have time to process the loan application and give you approval by the end of this year,” Nadal said.

For borrowers who have already received the green light from their lender, she adds that it is just as important to be aware of the pre-approval time limit, as most are only valid for 90 days.

“Don’t worry too much. If the pre-approval expires, it probably won’t be too difficult to renew it, as long as your situation hasn’t changed,” she says. “But remember: these things take time.

“To be safe, consider extending the offer before Christmas even if it hasn’t run out yet.”

Trust experts to navigate the season

Mortgage brokers are in a unique position as they can liaise directly with various lenders, escalate issues and negotiate timelines, allaying the anxiety of overwhelmed buyers.

Brokers can also show borrowers a panel of lenders to find competitive interest rates and practical product features.

“If speed is of the essence, you may have to compromise on certain features of your home loan, such as interest rates or fees,” says Nadal. “We have 36 lenders on our books, so there is a good chance there is a lender that suits what you need at that time.”

Depending on the lender you work with, they will have different cut-off periods for loan processing.

“It is crucial that you find out from your agent before the end of December the timeframe within which each bank must receive approval,” Nadal added.

Clear communication with your real estate agent, notary and the real estate agent will help you successfully complete the purchasing process during the busy season.

“Speak to your lawyer early and ask what you should consider before making your offer,” Nadal concludes.

“If you have to, make an offer with a longer term depending on financing, maybe three weeks instead of one. However much time they think you’ll need.”

This article first appeared on Mortgage choice and is republished with permission.